An artist's impression of the proposed Energy From Waste plant at North Hykeham
Costs for a new council-developed rubbish incinerator near Lincoln have soared by £35m.
The county council received the go-ahead to build an energy-from-waste facility in Paving Way, North Hykeham, in July last year and has spent the past six months speaking to potential developers.
Council officials reported throughout the planning stages that the energy project would cost £110m, with taxpayers' cash funding £25.7m and a loan contributing to the remaining shortfall.
But the figure has jumped by more than 30 per cent, with the project's price tag now standing at an estimated £145m.
The Conservative-led council does not currently know if it will have to contribute more funding from its own reserves to the scheme.
The power plant idea was developed by the authority in an effort to divert 150,000 tons of residents' rubbish away from landfill to meet European Union targets and avoid heavy fines.
Energy-from-waste project director Richard Belfield said the original estimate was set two years ago and new costs had been identified during discussions with potential contractors.
"The factors concerned include exchange rates – as most of the equipment is manufactured overseas – inflation rates and potentially helpful suggestions from bidders," he said.
"These suggestions, while adding initial capital costs, will ultimately result in a lower total cost to the council over the envisaged 25-year operational contract.
"The cost of a network of waste transfer stations needed to deliver waste to the facility has also been included in the revised estimate. There is no certainty that all that provision will ultimately be required."