Shares of Suzlon Energy, Inox Wind and NTPC Green Energy are likely to remain in focus. Bernstein has flagged a sharp impact from the Central Electricity Regulatory Commission's (CERC) revised deviation settlement mechanism (DSM) norms. The brokerage termed the development a potential "nightmare" for the wind industry, citing a significant tightening of deviation limits and a sharp increase in penalties effective April 1, 2026.
Under the revised framework, renewable energy generators must adhere more strictly to scheduled power supply.
- Solar deviation band reduced from 10% to 5%
- Wind deviation band reduced from 15% to 10%
- Penalty calculations tightened, implying a significant jump in charges
Deviation from planned supply will now attract materially higher penalties, increasing financial risk for developers. Unlike solar, wind generation is inherently unpredictable, making it difficult for developers to match scheduled supply.
Bernstein notes that unless developers significantly improve forecasting, the new penalty structure could lead to a double-digit revenue impact for wind assets in the coming years. This makes wind-heavy portfolios structurally more vulnerable under the new regime.
Earnings and IRR Pressure
For Suzlon, Inox Wind and NTPC Green, the tighter norms are expected to weigh on financial performance. Higher penalties could erode earnings, project internal rates of return (IRRs) may decline, and profitability becomes more sensitive to forecasting accuracy.
The brokerage highlights that the economics of wind projects could weaken meaningfully if deviation levels remain elevated. The revised norms could also alter how developers allocate capital. Bernstein expects the new DSM rules to push renewable companies away from wind in their capacity mix, with a preference emerging for solar-plus-storage solutions. Even in competitive bidding, developers may favour hybrid models over standalone wind, given the lower penalty risk.
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