World's first wind tax leaves green developers scratching heads

A one-of-its-kind plan to tax the wind in Argentina has drawn scorn from clean-energy companies, who say the move threatens climate-change goals that are already looking unattainable from Latin America to Asia.

Puerto Madryn, a city on the Atlantic coast where gusts are coveted by wind developers like Genneia SA, wants to tax the megawatts of energy sold by wind farms, according to the proposal. The levy would come at a time when renewables are already falling behind in Argentina.

The tax could cost a 100-megawatt farm US$20 million, creating problems for existing projects whose investors won’t have factored in that kind of hit from left field, and halting the construction of new ones, Argentina’s renewable energy group Cader said in a statement.

The move points to the difficulty of developing clean energy in emerging markets like Argentina. A credit famine, cash-strapped government, and increasing focus on shale oil and gas resources, have put the breaks on wind farms, jeopardising a goal of supplying 20 percent of power with renewables by 2025.