India set out plans to step up the pace of issuing contracts for electricity from wind farms, triggering a surge in the shares of one of the nation’s biggest maker of turbines.
Suzlon Energy Ltd. climbed 3.5 percent in Mumbai after the government said it will tender more than 5 GW of wind projects annually, a pace that will likely push installations past Prime Minister Narendra Modi’s target.
“We seek to bring out projects for auctioning every month, and at this rate the country could exceed its wind target of 60 GW by 2022,” Anand Kumar, secretary at the ministry of new and renewable energy, said at a briefing on Friday in New Delhi.
The decision underscores Modi’s ambition to clean up pollution and derive more of India’s energy from renewables. It’s also in step with expectations that Suzlon Chairman Tulsi Tanti set out in April, when he anticipated the nation may add 6 GW of new wind power in the current fiscal year, which will conclude in March 2018.
India’s wind-energy capacity increased by 5.4 GW in fiscal 2017 and 3.4 GW the year before. Modi has said he wants to see 175 GW of renewable power capacity by 2022.
India is among a growing list of countries stretching from Asia to Europe that have used auctions to make clean energy more affordable. The cost of power generated from wind turbines plunged to record levels this February in Asia’s first auction for contracts to deploy 1 GW of the technology, a victory for India’s effort to reduce pollution and ensure supplies.
Last week, the country invited bids for another gigawatt of wind projects, which were oversubscribed nearly three times by bidders.
Suzlon posted profit that was almost double expectations for quarter ending March 31 as shipments touched a record and cost-cutting measures took hold. The results put further in the past Suzlon’s default on debt payments, which stemmed from six years of losses through fiscal 2015.
The company is still waiting to exit a corporate debt restructuring program, which was supposed to be finished by March.
©2017 Bloomberg News
Lead image credit: Suzlon