Suzlon shares rise 5%, Inox Wind 6%; here's why

Shares of Suzlon Energy Ltd climbed 5 per cent, while those of Inox Wind Ltd surged 6 per cent in Monday's trade, amid a Reuters report suggesting the government has let renewable power producers pay to keep grid connectivity after delays.

Following the development, Inox Wind shares soared 6.10 per cent to hit a high of Rs 78.20 on BSE. Suzlon Energy, on the other hand, gained 4.64 per cent to hit a high of Rs 49.30. Business Today could not independently verify the report. Both Inox Wind and Suzlon Energy are renewable energy solution providers.

The Central Electricity Regulatory Commission (CERC) has allowed clean energy developers to seek additional time to meet key grid connectivity milestones by paying daily charges, instead of immediately losing their connectivity rights, according to a Reuters report.

Under the new framework, developers will have to pay Rs 1,000 per MW per day for extensions related to land acquisition and financial closure, while delays in commencing commercial operations will attract a higher charge of Rs 3,000 per MW per day, the report suggested.

The move followed requests from several power producers whose projects had been delayed but remained under development, even as India's grid planning authority began issuing notices for withdrawal of connectivity.

CERC, as per Reuters, said grid connectivity was a limited resource and that projects retaining grid capacity without making sufficient progress could prevent other developers from accessing it. Several clean energy projects in India have also faced delays due to inadequate transmission infrastructure.

Developers can seek extensions of up to three months to fulfil land-related requirements, six months for financial closure and up to 12 months for commissioning. Projects that fail to meet the extended deadlines could still lose their grid connectivity and associated bank guarantees.

India is targeting around 500 GW of non-fossil fuel-based power capacity, up from about 300 GW currently.