Why in the news?

  • Government of India notified National Policy on Geothermal Energy to accelerate clean energy transition, supporting India’s net zero 2070 commitment.

National Policy on Geothermal Energy 2025

  • What is it?:
    • It aims to unlock India’s largely untapped geothermal energy potential for both power generation and direct‐use applications.
    • It is part of India’s strategy to accelerate the clean energy transition, support energy security, and meet its Net Zero by 2070 commitment.
  • Nodal Agency: The policy was notified by the Ministry of New & Renewable Energy (MNRE).
  • Objectives:
    • Establish geothermal energy as a major pillar of India’s renewable energy mix, contributing significantly to climate goals and energy security.
    • Strengthen research, development and innovation, including enhancements in detection, exploration, drilling, reservoir management, and direct‐use technologies.
    • Adopt best practices globally, via international cooperation, standards, and partnerships.
    • Deploy geothermal solutions not just for electricity, but also for heating/cooling, agriculture (e.g. greenhouses, cold storage), aquaculture, tourism, desalination, and ground source heat pumps (GSHPs).
    • Utilise existing infrastructure where feasible – e.g. repurposing abandoned oil and gas wells.
  • Key Features:
    • Identification of geothermal provinces and hot springs: Geological Survey of India (GSI) has identified 381 hot springs spread over 10 geothermal provinces (regions include Himalayan province, Naga‐Lusai, Andaman & Nicobar Islands, Son‐Narmada‐Tapi, etc.).
    • Financial & fiscal incentives:
      • 100% FDI allowed in the geothermal sector.
      • Grants, concessional loans, tax incentives for early stage exploration, risk mitigation (for example when drilling fails).
      • Long‐term leases of up to 30 years for geothermal projects, with possibility of extension depending on resource availability.
    • Regulatory simplification: Encouragement of single‐window clearances, streamlined regulations, inter‐ministerial coordination. Support from States, public and private sectors.
    • Pilot projects: Launch of several pilot and resource assessment projects to test viability, demonstrate technology, and build capacity.
  • Challenges:
    • High upfront and exploration costs, particularly drilling, and risk of unsuccessful exploration.
    • Site‐specific nature of geothermal resources and geological uncertainty.
    • Environmental, land use and regulatory complexities.
    • Need for technical capacity, skilled workforce, R&D, institutional framework.
  • Expected Outcomes:
    • Strengthen energy access and reliability, possibly with base‐load renewable energy.
    • Help diversify India’s renewable energy capabilities beyond solar, wind, biomass, hydropower.
    • Support decarbonization especially in heating and cooling, agriculture, etc.
    • Job creation and technology innovation in drilling, geothermal systems, hybrid systems.