Suzlon, Inox Wind tank up to 5% as Centre weighs reverse auctions of wind power

1 month ago

The Centre's move decided to revisit stance on reverse auctions as a result of undersubscription and higher tariff discovery in recent wind bids.

March 04, 2024 / 10:44 AM IST

Suzlon shares have gained more than 75 percent over the past six months.

Suzlon shares have gained more than 75 percent over the past six months.

Wind energy stocks traded lower on March 4 after reports suggested the government was weighing reverse auctions of wind capacity power.

Suzlon shares fell more than 4 percent to an intraday low of Rs 41.75 per share on the NSE, while Inox Wind tumbled 5 percent to its lower circuit at Rs 552.65 per share.

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The Ministry of New and Renewable Energy was revisiting its stance on reverse auctions, considering bringing it back as a result of undersubscription and higher tariff discovery in recent wind bids.

In the reverse auction mechanism, the bidders bid against each other until a bid is not challenged by a counter-offer. The method did not result in enough wind capacity installations, leading the ministry to scrap the method.

In January 2023, the Centre revised the auction process for wind energy projects. It also set a target to invite bids for 8 gigawatts (GW) of projects each year till 2030, the ministry of new and renewable energy (MNRE) said on January 12.

While the tariffs did come down as a result of reverse auctions, it wasn't enough to support capacity installations. Following the implementation of the closed bidding system, tariffs began to rise again.

Suzlon shares have gained more than 75 percent over the past six months, with Inox Wind shares surging around 170 percent during the same time period.

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