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Government Notifies National Policy on Geothermal Energy (2025) to Accelerate Clean Energy Transition, Supporting India’s Net Zero 2070 Commitment
 
Key points of National Policy on Geothermal Energy (2025)

• Objective: To promote exploration, development, and utilization of geothermal energy as a clean, reliable, and sustainable renewable energy source contributing to India’s Net Zero 2070 target.
• Geothermal Potential: Identifies about 10 GW geothermal capacity with 381 hot springs and 10 geothermal provinces including the Himalayas, Cambay Basin, Aravalli Range, Godavari Basin, Mahanadi Basin, and others.
• Applications: Supports electricity generation, direct-use such as district heating, agriculture, aquaculture, tourism, cold storage, and space heating/cooling using Ground Source Heat Pumps (GSHPs).
• Project Development: Provides for exploration permits, long-term leases up to 30 years, and sanctioning of pilot and resource assessment projects to evaluate geothermal viability.
• Financial Incentives: Includes risk-sharing, concessional loans, viability gap funding, GST exemption, tax holidays, accelerated depreciation, property tax relief, and 100% Foreign Direct Investment (FDI) allowed.
• Technological Innovation: Encourages Research & Development of hybrid geothermal-solar systems, Enhanced Geothermal Systems (EGS), retrofitting abandoned oil and gas wells, and local innovation.
• Regulation and Facilitation: MNRE is the nodal agency; state governments to establish single-window clearance for faster approvals; emphasis on sustainability, fluid reinjection, and consultation especially in ecologically sensitive zones.
• Collaboration: Promotes cooperation with international geothermal agencies and experts, oil and gas companies, state governments, academic institutions, and private sector involvement.
• Ecosystem Building: Aims to build a robust public-private ecosystem to attract startups, research, and investment in geothermal energy.
• Initial Steps: Five pilot and resource assessment projects are already sanctioned to map potential and demonstrate technology viability across different regions.

This policy represents a significant step for India to diversify its renewable energy portfolio with baseload geothermal power, supporting sustainable development and energy security goals.
 
Key Aspects of Geothermal Energy

• Source: Heat from the Earth’s core and mantle due to radioactive decay and residual heat from Earth’s formation.
• Types of geothermal plants:

• Vapor-dominated: Use superheated steam from reservoirs.
• Liquid-dominated: Use hot water to generate steam.
• Engineered systems: Enhanced geothermal systems inject water to improve heat extraction.

• Uses: Electricity generation, direct heating of buildings, heating water, and industrial processes.
• Global presence: Generated electrically in around 26 countries with significant contributions in the US, Iceland, Philippines, Kenya, and New Zealand.
• Environmental impact: Low greenhouse gas emissions compared to fossil fuels; considered a clean and sustainable energy source.
• Capacity: As of 2024, global installed geothermal electric capacity is around 16.7 GW with various countries using it for a substantial portion of their electricity mix (e.g., Kenya ~34%, Iceland ~27%).

Advantages

• Renewable and sustainable with minimal carbon footprint.
• Provides stable, base load power unlike intermittent renewables.
• Small land footprint and scalable from small to large projects.

Challenges

• Geographically limited to areas with suitable geothermal reservoirs or requiring costly engineered systems.
• Initial drilling and development costs are high.
• Risk of induced seismicity in some enhanced geothermal projects.

Countries including India are actively pursuing policies to harness geothermal energy for clean energy transition and de-carbonization goals, reflecting growing interest globally to enhance this renewable energy source.

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