Suzlon Energy, Inox Wind Shares Rise Up To 6%: Why Did Renewable Energy Stocks Gain Today?
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Suzlon Energy and Inox Wind shares gained up to 6% after CERC allowed renewable developers to seek more time for grid connectivity milestones.
Shares of Suzlon Energy Ltd and Inox Wind Ltd gained sharply on Monday, August 17, with Inox Wind rising over 6% and Suzlon Energy gaining over 4%, after CERC allowed clean energy developers to pay charges to seek additional time for meeting certain grid connectivity milestones, according to a Reuters report.
Inox Wind share price rose as much as 6.10% to Rs 78.20 on the BSE, while Suzlon Energy shares gained up to 4.64% to Rs 49.30 during the session. The move comes as the regulator's decision could provide renewable power developers with greater flexibility in dealing with delays in project execution and grid connectivity.
Why did Suzlon Energy, Inox Wind shares rise?
The Suzlon Energy and Inox Wind share price gains came after CERC permitted clean energy developers to seek extensions for meeting key grid connectivity requirements by paying daily charges, rather than immediately losing their connectivity rights.
Under the framework, developers will have to pay Rs 1,000 per MW per day for additional time related to land acquisition and financial closure. Delays in commencing commercial operations will attract a higher charge of Rs 3,000 per MW per day, according to the report.
The decision is significant for renewable energy companies as several projects have faced delays while remaining under development. The move could allow developers to retain grid connectivity while they work towards completing pending project milestones.
What has CERC allowed renewable energy developers to do?
Developers can seek extensions of up to three months for meeting land-related requirements, six months for financial closure and 12 months for commissioning.
However, projects that fail to meet the extended deadlines could still lose their grid connectivity and associated bank guarantees.
CERC's decision followed requests from several power producers seeking additional time for projects that had been delayed, even as India's grid planning authority had started issuing notices for withdrawal of connectivity.
The regulator said grid connectivity is a limited resource and that projects retaining grid capacity without making adequate progress could prevent other developers from accessing it.
Why is the decision important for renewable energy companies?
The development comes at a time when renewable energy projects in India have faced execution challenges, including delays linked to transmission infrastructure.
Allowing developers to pay for additional time could provide greater flexibility for projects that are progressing but have not been able to meet the original grid connectivity milestones within the stipulated timelines.
India is targeting around 500 GW of non-fossil fuel-based power capacity, compared with about 300 GW currently.
At market close on Monday, Suzlon Energy shares ended at Rs 49.00, up 4.03%, while Inox Wind shares closed at Rs 78.13, higher by 6.05%.
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Rochelle Britto is a business journalist with 8+ years of experience in financial journalism. She covers equity markets, corporate earnings, IPOs, commodities and the economy.
As a reporter with leading business publications, she has tracked financial markets and covered sectors including banking and financial services, retail, consumer goods, advertising and e-commerce.
Outside work, she enjoys travelling, discovering local cultures and spending time in nature.
