The price of political risk

Five changes of policy in the space of just four years is proving too much for Dutch wind power. The political risks of investing in wind plant in the Netherlands are now so high that not even a proposal for a combined tariff and tax credit -- giving relatively high returns -- is providing stability enough. Developers like BP (right) are deserting the market in droves. The Australian government should take note. It is being pressured to follow Holland and reverse its green power policies (page 19), just as lots of projects are on the way. If wind energy history has told us nothing else, it is that political risk is a market killer.