In draft guidelines, the Ministry has said that while states can allocate projects less than 100 MW through the Memorandum of Understanding route, projects over 100 MW should be allocated “solely on the basis of competitive tariff-based bidding process.”

Private firms would have to sign long-term power purchase agreements of at least 25 years and contracts could also be cancelled if implementation schedules are not met.

The draft guidelines have been sent to stakeholders for consultations and are expected to be finalised shortly.