The Ministry of New and Renewable Energy (MNRE) has issued the National Policy on Geothermal Energy to advance research, exploration, drilling techniques, reservoir management, and cost-effective power generation, along with wider adoption of direct-use technologies.

Geothermal projects will receive the same support mechanisms as other renewable energy sources under the policy, including interstate grid access, interstate transmission system, and open access charge waivers, as well as must-run status, renewable purchase obligation eligibility, and participation in the Indian Carbon Credit Trading Program.

The policy seeks to establish geothermal energy as one of the pillars of India’s renewable energy landscape, contributing significantly to national climate commitments and the 2070 Net Zero Goal.

It promotes collaboration with other ministries, international geothermal bodies, and national research institutes to integrate global best practices in exploration, resource assessment, and technology deployment.

It emphasizes deploying geothermal heating and cooling solutions, including ground source heat pumps (GSHPs), to decarbonize buildings, agriculture, and industries.

The policy facilitates advanced exploration through coordination with the oil and gas sector, including deep and multilateral drilling, as well as repurposing abandoned wells for large-scale power generation.

Policy Implementation

MNRE will act as the nodal body for implementing geothermal energy projects. Key mechanisms include technology collaboration with pioneering countries and international organizations, partnerships with donor agencies and development finance institutions for concessional finance, and R&D under the Renewable Energy Research and Technology Development Program for resource assessment, pilot projects, and future national programs with financial support.

Soft loans may be provided through IREDA and other institutions, while centres of excellence will be established for technical support, capacity building, and industry-driven innovation.

MNRE will also issue guidelines, release periodic progress reports on milestones such as resource assessments and pilot projects, and ensure streamlined policy updates.

Potential Geothermal Sites 

Since 1973, the Geological Survey of India (GSI) has identified 381 hot springs with surface temperatures between 35°C and 89°C. While Himalayan regions can reach reservoir temperatures of about 200°C, most of India lies in a medium-to-low enthalpy zone (100°C–180°C), making it well-suited for direct applications such as ground source heat pumps (GSHPs), building heating and cooling, greenhouse heating, and cold storage.

GSI has identified several geothermal energy sites across the country. In Ladakh, sites at Puga, Chumathang, Gaik, Demchok, Nubra (Panamik), and Galhar have been identified. In Jammu & Kashmir, Sidhu has been identified, while in Himachal Pradesh, the sites are Manikaran, Kasol, Tattapani, and Tapri. In Uttarakhand,  Tapoban, Gari, Joshimath, Juma, Jamunotri, Ganganani, Beda, Joti, Nyu, Dar, and Bheti are identified as potential geothermal sites.

In Arunachal Pradesh, Tsachu (Tawang) and Takshing, and Polok and Yumesamdong have been identified in Sikkim. Other locations are Sohna (Haryana), Bhimband in Munger (Bihar), Surajkund and Tantloi (Jharkhand), Bakreshwar (West Bengal), Tattapani (Chhattisgarh), Anhoni (Madhya Pradesh), Dholera, Tuwa, and Tulsishyam (Gujarat), Deulajhari (Athmallik) and Attri (Odisha), Unhavare (Khed), Sativali, and Tural (Maharashtra), and Manuguru (Telangana).

MNRE will establish a geothermal data repository in collaboration with national agencies, international partners, and the oil and gas industry, encompassing well data, drilling expertise, mineral identification, equipment sharing, and geophysical surveys. The Directorate General of Hydrocarbons (DGH) data repository may be accessed under National Data Repository guidelines, with operators required to submit acquired data.

Developers must also conduct detailed resource and feasibility studies to guide projects in power generation, heating/cooling, geo-tourism, greenhouse heating, and horticulture processing.

Scope of Geothermal Energy Systems

The policy covers geothermal resource assessment through surveys and exploratory drilling aligned with international norms; regulated drilling for shallow and deep exploitation; and power production via dry steam, flash steam, binary cycle, organic rankine cycle, and modular plants, including Enhanced Geothermal Systems (EGS).

Direct uses include cold storage, food processing, greenhouse heating, aquaculture, drying, tourism, and geothermal parks. GSHPs can provide nationwide heating and cooling using the earth’s stable temperature.

Emerging technologies, including EGS, advanced geothermal systems, hybrid solar-geothermal plants, closed-loop systems, geothermal storage, offshore wells, and deep direct-use applications, are also included.

The framework enables the repurposing of abandoned oil and gas wells for geothermal projects. It recognizes mineral by-products, such as silica, borax, and lithium, as potential value additions, subject to concessions and royalties.

Developmental Model

The developmental model for geothermal projects covers phases from surface exploration and drilling to feasibility studies, design, construction, commissioning, monitoring, and operation. With 100% foreign direct investment permitted in renewables, the policy prioritizes indigenous technologies to reduce import dependence, encouraging local innovation in drilling, monitoring, and reservoir management.

Safe, non-polluting use of geothermal fluids with reinjection is emphasized, along with funding preference for the northeastern region and special category states.

The government will explore risk-sharing mechanisms with developers and promote the conversion of abandoned oil and gas wells into geothermal plants in collaboration with the Ministry of Petroleum and Natural Gas (MoPNG), DGH, and oil companies.

Equipment approved under Essentiality Certificates for oil and gas may be used in geothermal projects, and diverse economic models such as revenue sharing and milestone-based payments will be considered.

Joint ventures between oil and gas companies, mineral companies, and geothermal developers can combine expertise and financial resources, enabling the funding and development of large-scale geothermal power plants and projects.

Where feasible, oil and gas production facilities, such as pipelines, power generation systems, and processing plants, can be repurposed for geothermal energy, minimizing the need for significant capital investments in new infrastructure.

Financing Mechanisms

The government may adopt various measures to enhance the viability and bankability of geothermal projects, including support for research, resource assessment, and pilot demonstrations under MNRE’s Renewable Energy Research and Technology Development Program.

It also encourages FDI and funding from donor agencies, multilateral and bilateral entities, and philanthropic organizations through grants or loans.

Potential financing mechanisms include long-term concessional loans, sovereign green bonds, viability gap funding, risk-mitigation loans or grants, and feed-in tariffs.

Regulations

Geothermal projects will receive the same support mechanisms as other renewable energy sources. GSHPs and district heating/cooling systems may be promoted under the National Building Code.

MNRE, in coordination with the Ministry of Environment, Forest and Climate Change, may also develop environmental and social impact assessment guidelines for geothermal projects, drawing on international best practices.

Guidelines for States

Project developers may approach State Governments for allocation of geothermal zones or sites, with permits and land leases issued at the state level. In areas overlapping with oilfields, proposals will be evaluated for technical and operational feasibility, and if compatible, coordinated with MoPNG for approval. Exploration may also proceed in areas with existing prospecting licenses upon Ministry recommendation.

To expedite projects, a streamlined single-window system will be set up through designated state nodal agencies to manage permissions, clearances, monitoring, and implementation, including land, water, forest, and environment approvals. Developers must comply with state regulations and conduct stakeholder consultations with compensatory measures in sensitive areas.

States may allocate sites for exploration for a period of three years (extendable by up to two years, or longer in high-altitude regions) and for development for up to 30 years, with possible extensions. To encourage deployment, governments may provide concessional land allotments, while defense clearance, if required, will be handled case-by-case. All procedures will be streamlined through portals to enable concurrent and faster clearances.

A recent report by the International Energy Agency noted that India is expected to be the third-largest market for next-generation geothermal power capacity by 2050.

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