Context:

India has set some of the world’s most ambitious renewable energy targets as part of its fight against climate change, with a clear goal of becoming a Net Zero economy by 2070. In this journey, sources like solar power, wind energy, hydropower, and bioenergy have taken the lead and now form the backbone of India’s renewable energy mix. But there is another natural source of clean energy that India has in abundance and has hardly used so far called the geothermal energy, the heat stored deep inside the Earth.

• • Despite India’s unique geology with hot springs, geothermal provinces, and rift basins, this energy source has remained mostly untapped. Recognizing this gap, the Ministry of New and Renewable Energy (MNRE) has, for the first time, come up with a National Policy on Geothermal Energy in September 2025. The new policy is designed to push India forward in exploring and using this hidden resource. It focuses on incentives, regulatory reforms, and collaborations with global leaders to develop geothermal projects that can supply both electricity and heating. This step marks the beginning of a new chapter in India’s renewable energy journey. It goes beyond the sun, wind, and water, and looks towards the heat beneath the Earth’s surface as a reliable and clean energy source for the future.

What is Geothermal Energy?

Geothermal energy is the heat stored beneath the Earth’s crust. It can be harnessed in two major ways:

·         High-enthalpy resources (commonly found near volcanic regions, geysers, and hot springs) are mainly used for generating electricity.

·         Low- and medium-enthalpy resources (hot rocks, shallow ground layers) are better suited for direct-use applications such as district heating, cooling through geothermal heat pumps (GSHPs), greenhouse heating, aquaculture, food drying, and space conditioning.

A typical geothermal system involves:

1.       Production and reinjection (wells and pumps),

2.      Transport (pipelines),

3.      Distribution (heat exchangers), and

4.     End-use applications (electricity, heating, cooling, or industrial processes).

Unlike solar or wind, geothermal can generate electricity 24/7, making it a reliable baseload source that strengthens grid stability and enhances energy security, especially in remote regions.

India’s Geothermal Potential:

India’s geological diversity provides a range of geothermal opportunities. 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 around 200°C, most Indian sites fall within a medium-to-low heat enthalpy zone (100°C–180°C), making them suitable for direct-use applications.

The 10 major geothermal provinces identified by GSI are:

1.       Himalayan Geothermal Province

2.      Naga-Lusai Province

3.      Andaman & Nicobar Islands

4.     Son-Narmada-Tapi (SONATA)

5.     West Coast

6.     Cambay Graben (Gujarat)

7.      Aravalli Province

8.     Mahanadi Province

9.     Godavari Province

10. South Indian Cratonic

Key geothermal sites include:

·         Ladakh: Puga, Chumathang, Nubra (Panamik), Demchok

·         Himachal Pradesh: Manikaran, Kasol, Tattapani

·         Uttarakhand: Tapoban, Joshimath, Yamunotri, Ganganani

·         Arunachal Pradesh: Tsachu (Tawang), Takshing

·         Gujarat: Cambay Basin, Dholera, Tulsishyam

·         Jharkhand & Chhattisgarh: Tantloi, Surajkund, Tattapani

·         Maharashtra: Unhavare, Tural

·         Andaman & Nicobar Islands

The International Energy Agency (IEA) estimates India’s geothermal potential at 10.6 GW, with scope to rise further with new technologies like Enhanced Geothermal Systems (EGS).

Significance of Geothermal Energy in India:

1.       Reliable baseload power: Unlike solar and wind, geothermal plants can operate continuously with capacity utilisation above 80%.

2.      Cost-effective for remote areas: For instance, in Andaman & Nicobar Islands, where power costs ₹30–32 per unit, geothermal can reduce it to ₹10–11.

3.      Heating for cold regions: In Ladakh, geothermal can supply both electricity and space heating, reducing dependence on costly diesel imports.

4.     Repurposing abandoned oil wells: Thousands of idle wells in Gujarat and Rajasthan can be adapted for geothermal use, reducing costs and extending asset life.

5.     Environmental gains: Geothermal plants emit 99% less CO₂ compared to fossil-fuel-based power plants.

6.     Diversification of renewables: It adds another pillar to India’s renewable energy portfolio beyond solar, wind, biomass, and hydropower.

The National Policy on Geothermal Energy (2025)

The policy, issued by Ministry of New and Renewable Energy (MNRE), lays down a framework to attract investment, reduce risks, and ensure sustainable development.

Key Features of the Policy:

·         Scope and stakeholders: Applies to Central/State governments, public/private developers, academic institutions, startups, and agencies involved in geothermal exploration.

·         Project duration: Supports geothermal projects for up to 30 years, extendable based on resource availability.

·         Private and foreign investment: Allows 100% FDI in geothermal projects.

·         Fiscal incentives: Proposes tax holidays, import duty exemptions, and Viability Gap Funding (VGF).

·         Financing: Soft loans to be provided by IREDA and other institutions.

·         International collaboration: Partnerships with Iceland, Norway, US, and Indonesia for technology transfer and R&D.

·         R&D focus: Pilot projects under MNRE’s RE-R&D Scheme, with CoEs (Centres of Excellence) to be established for technical support and training.

·         Data repository: A national geothermal database to be created with GSI, CSIR-NGRI, DGH, and CGWB.

·         Policy review: Guidelines will be updated periodically based on stakeholder feedback.

Challenges in Geothermal Development:

·         High upfront cost: Around ₹36 crore per MW of capacity — significantly higher than solar or wind.

·         Exploration risks: Locating viable geothermal reservoirs requires extensive surveys and drilling, with uncertain results.

·         Regulatory overlaps: Multiple laws apply, including the Mines and Minerals Act (1957), Electricity Act (2003), Environment Protection Act (1986), and forest and wildlife regulations.

·         Limited experience in India: Compared to solar and wind, geothermal technologies and expertise are nascent in India.

Global Experience and Lessons for India:

Globally, geothermal power capacity stood at 15.4 GW (2024), with the United States, Indonesia, and the Philippines as leaders. Countries like Iceland and Norway have pioneered advanced geothermal systems and direct-use applications such as district heating and aquaculture.

·         United States: Using geothermal in both electricity and heating, with growing interest from technology companies to power data centers.

·         Indonesia: Rapidly scaling up geothermal capacity due to volcanic geology.

·         Germany: Integrating geothermal into district heating networks.

·         Iceland: Nearly all homes heated by geothermal, showcasing direct-use potential.

Recent Developments in India:

·         Vedanta & IIT Madras project in Rajasthan: Retrofitting abandoned oil wells in Barmer to generate 450 kWh of electricity.

·         Reliance Industries: Announced plans to expand into geothermal through its oil and gas business.

·         Pilot studies: Norwegian and Icelandic companies are exploring projects in Gulf of Cambay (Gujarat), Arunachal Pradesh, and Uttarakhand.

·         US Trade Administration (2024): Identified Puga and Chumathang in Ladakh as promising sites.

Wider Implications:

1.       Energy security: Reduces dependence on fossil fuel imports.

2.      Decentralised power: Supports local energy needs in remote, hilly, and island regions.

3.      Industrial applications: Enables cold storage, desalination, greenhouse farming, and food processing industries.

4.     Geo-tourism: Potential for spas, resorts, and wellness-based tourism around hot springs.

5.     Climate action: Adds a low-carbon option to India’s renewable energy basket.

Conclusion:

Geothermal energy represents a largely untapped pillar of India’s renewable energy strategy. The National Policy on Geothermal Energy (2025) is a timely step that brings together government support, international partnerships, and private sector interest. While high costs and exploration risks remain barriers, innovations like repurposing oil wells and Enhanced Geothermal Systems can make geothermal commercially viable. For India, the challenge now is to move beyond pilot projects to scalable models that integrate geothermal into the national energy transition. If implemented effectively, geothermal energy can play a critical role in achieving India’s Net Zero ambitions and provide sustainable solutions for both power and heat in some of the country’s most challenging terrains.