Suzlon, Inox Wind tank up to 5% as Centre brings back reverse auction for wind power projects
Upstox
2 min read • Updated: March 4, 2024, 2:49 PM
Summary
Government has directed implementing agencies to shift to the reverse auction route amid a rise in power tariffs for wind energy projects. Wind power companies think that the move can hurt capacity additions.
Shares of wind energy companies, Suzlon Energy Ltd and Inox Wind tanked up to 5% on Monday after reports stated that the government has brought back the reverse auction route for wind energy projects.
Inox Wind tanked 5% to hit the lower circuit at ₹552.65 apiece on NSE. More than 13 lakh shares traded on the exchange in morning deals with sell orders outstripping buy volume. Wind power major Suzlon Energy also plunged by 5% to hit the lower band at ₹41.75 per share on NSE. More than 3 crore shares changed hands on the exchange.
Other renewable energy stocks, operating in the wind power sector, also dropped up to 4%. Aandi Green Energy dropped 0.67% while Orient Green Power Company declined 4.11%. On the other hand JSW Energy gained more than 2%.
According to reports, the government has directed project implementing agencies such as SJVN, NHPC and NTPC to explore reverse bidding routes for wind power projects.
The directive has come after the government found instances of under-subscription of wind power capacity and higher tariff quotes in the auctions.
The government has also directed the implementing agencies to limit the auction size to 600 MW for standalone wind power projects and invite bids on a pan-India basis.
The PSU companies and state agencies are implementing agencies for project developers such as Inox Wind and Suzlon.
According to Central Electricity Authority data, India added a total of 10,354 MW of wind power capacity from March 2017 to March 2023 reflecting an annual addition of just 1,725 MW.
Tariffs quoted in the auctions dropped from ₹3.46 a kWh to a low of ₹2.44. However, the drop in tariffs also resulted in the surrender of 4,000 MW of projects.
After the implementing agencies shifted to closed bidding from reverse bidding, tariffs saw an increase to a high of ₹3.6 and ₹4.24 per unit.
The government has now directed agencies to bring back reverse bidding to rein in rising tariffs as well as auction projects on a pan-India basis instead of state basis. Both Suzlon and Inox Wind have reported bagging repeat orders from customers amid India’s bid to increase its energy mix.