| Popis: |
The independent power (IPP) industry faces the highest dimensionof political risk, regulatory uncertainty and market challenges in its briefdynamic history over the next five years. A number of key market issuesin the U.S. driven by regulatory changes are pending for resolution im-pacting the long term health and performance of the industry.Originally, the industry was spawned by the provision of strongregulatory and tax incentives to promote successful non-utility genera-tion and development. These initial inducements were overtaken by theforces of competition and project development through the provision ofregulatory market supports, competitive bidding and least cost planningat the state level.Finally, competitive market forces were in control during the pastdecade as power matured into more of a commodity industry with price(through marketing and trading) becoming the critical arbiter of service.This created the current transitional environment in the U.S. in whichregulatory risk is at the largest level the industry has faced in its briefhistory. When converged with the threats of overbuilding and plum-meting asset valuations, the combination, until 2005, could be deadly.Frequently, IPP developers have faced regulatory risk and its con-sequences in the development of international projects during the pastdecade. Special forms of political risk insurance coverage and support-ive government programs have been established to manage the volatil-ity and uncertainty associated with the political and regulatory dimen-sion of project development in international markets. |
