The Ministry of Power has announced a significant boost for solar and wind energy companies by exempting them from inter-state transmission (ISTS) charges on electricity generated from solar and wind sources. This exemption has been expanded to cover green ammonia and green hydrogen projects as well.

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In addition, offshore wind power projects commissioned by 2032 will remain exempt from ISTS charges for 25 years. However, projects commissioned after 2032 will be subject to ISTS charges based on the period of commissioning. This move aims to incentivise the early commissioning of solar and wind power projects, allowing companies to save on ISTS charges.

In a recent interview with CNBC-TV18, Himanshu Mody, CFO of Suzlon Energy, said that there has been no immediate impact from the waiver. While the exemption is expected to have positive implications for the offshore wind sector, its full effects are yet to be realised.

Mody further highlighted that FY24 is anticipated to witness strengthened margins, similar to what was observed in the fourth quarter of FY23. He emphasised the significance of wind as a backend source for the generation of green ammonia and hydrogen, noting the positive long-term policy moves for the sector.

Also Read | Boost for solar, wind energy companies as government waives inter-state transmission charges

Mody expressed optimism, stating that customers are the primary beneficiaries of this announcement. The waiver is expected to contribute to a higher order book and improved margins for the industry.

He further added that the Indian wind energy industry, which has experienced a downturn for the past 5-6 years, should witness a significant uptick in sentiments and performance over the next few years, driven by these favorable policy initiatives.

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Suzlon ended FY23 on a strong note. Their margin expanded while they posted a net profit in q4 versus a loss on a year-on-year basis. The positive trend observed towards the end of FY23 is expected to continue, underpinning the company's financial performance in the upcoming fiscal year. Suzlon Energy's strategic initiatives and robust order book provide a strong foundation for achieving this goal.

Talking about the order book, Mody said that the company had secured 665 MW in orders during FY23, indicating a healthy demand for its wind energy solutions. Furthermore, he highlighted that the company's order book currently stands at an impressive 1.5 GW, with the orders being confirmed.

“The balance sheet and financial goals for the company are now totally behind us. Our order book, of 1.5 gigawatts, already under our belt and active negotiations on for significant order book uptake as well,” Mody added.

Devansh Jain, Executive Director of InoxGFL Group expressed his optimism regarding the long-term transmission fee waiver. He believes that this will have a positive impact on transmission charges and pave the way for a brighter future for the industry.

Suzlon Energy and other players in the industry are closely monitoring the situation and evaluating the long-term benefits of this policy change.

“It's a very forward-looking move to announce a long-term transmission waiver for offshore wind projects, as well as wind projects, which are used to generate green hydrogen and green ammonia,” Jain told CNBC-TV18 on May 30.

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