4 min readNew DelhiAug 1, 2026 06:58 AM IST
First published on: Jul 31, 2026 at 01:35 PM IST
The project cost of the four under-construction Russian-designed nuclear reactor units at the Kudankulam Nuclear Power Plant (KKNP) has increased by nearly 55% over the original sanctioned cost since the outbreak of the Russia-Ukraine war.
As per latest government data, the cost of these four reactors, each with 1 gigawatt capacity, increased from Rs 89,470 crore to Rs 1,38,330 crore. The project cost of Units 3 and 4 has increased by 72.9%, while that of Units 5 and 6 has risen by 39.9% over their respective sanctioned costs.
Rise in project costs of KKNP reactors 3, 4, 5, and 6.
A crucial juncture
Located in Tirunelveli district of Tamil Nadu, KKNP is India’s one of largest nuclear power projects. It consists of six units of pressurised water reactors of VVER design, which were established in technical collaboration with Russia. The first two units (KKNPP Units-1 & 2) are already in operation, while Units 3 and 4 are still under construction and are due to be operational by 2027. The remaining two units are at different stages of progress and are likely to be commissioned by 2030.
The sharp rise in project costs comes at a crucial juncture for India’s nuclear power sector. Last year, the government opened the tightly regulated civil nuclear sector to private participation, drawing interest from global nuclear technology suppliers from Russia, the US, and France. As Indian companies evaluate partnerships and competing reactor technologies, project costs are expected to be a key consideration as any significant cost escalation could ultimately translate into higher electricity tariffs.
Meanwhile, the cost revision process is also underway for two other ongoing nuclear power projects — Kaiga in Karnataka and Gorakhpur in Haryana. Both projects are based on India’s indigenous pressurised heavy water reactor (PHWR) technology and comprise two 700 megawatt electric reactor units each.
A similar trend is visible at the Rajasthan Atomic Power Project in Rawatbhata, where the cost of two indigenous PHWR units has surged by about 86% over the original sanctioned cost. While one of the units commenced commercial operations in April this year, the second is in the advanced stages of commissioning.
Why project cost matters
Fuel costs for nuclear plants represent a small proportion of total generating costs. However, capital costs of nuclear power plants are higher than those for coal-fired plants and much higher than those for gas-fired plants.
As per World Nuclear Association, the economics of new nuclear plants are heavily influenced by their capital cost, which accounts for at least 60% of their Levelised Cost of Electricity, the total cost to build and operate a power plant over its lifetime divided by the total electricity output dispatched from the plant over that period. Interest charges and the construction period are also critical determinants of the final cost of power. Once a nuclear plant has been constructed, the production cost of electricity is low and predictably stable.
Thus, any cost escalation has the potential to make electricity generated by these plants more expensive. This could pose a challenge to India’s ambitious nuclear expansion plans in a price-sensitive electricity market. It can also affect the competitiveness of nuclear power relative to other sources of generation.
India has faced such concerns before. The proposed French-assisted nuclear power project at Jaitapur in Maharashtra has remained stalled for years, with the expected high electricity tariff emerging as one of the key hurdles to its progress.
Located in Tirunelveli district of Tamil Nadu, Kudankulam Nuclear Power Plant is India’s one of largest nuclear power projects. Photo: Wikimedia Commons 
Rise in project costs of KKNP reactors 3, 4, 5, and 6.
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