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India has rolled out its first national geothermal energy policy to boost clean power generation from underground heat sources. The move opens doors for oil, gas and mineral companies to form joint ventures with renewable developers. With 381 hot springs and 10 geothermal provinces identified, states like Ladakh, Himachal Pradesh and Gujarat are set to lead initial projects. Global leaders such as the US, Indonesia and the Philippines have already established capacity, and companies in sectors like AI are also exploring geothermal for low-carbon electricity. Indian firms including ONGC have earlier piloted geothermal studies in Ladakh.
India's Ministry of New and Renewable Energy (MNRE) has announced the country's first national policy on geothermal energy to expand clean power capacity. The framework aims to encourage investment, offer fiscal incentives and create long-term guidelines for tapping subterranean heat for electricity and direct use applications. Advertisement
The policy provides for tax holidays, import duty waivers and viability gap funding to attract developers. It also supports 100% foreign direct investment and concessional loans for projects with international collaborations. Each geothermal project will be allowed for up to 30 years, with possible extensions depending on the available resource.
The MNRE has identified 381 hot springs and 10 geothermal provinces, spread across Ladakh, Himachal Pradesh, Gujarat, Chhattisgarh, and parts of Andhra Pradesh. These zones are expected to see the first wave of development. The plan also proposes using abandoned oil and gas wells for geothermal exploration and deploying ground source heat pumps for heating and cooling in urban and industrial facilities.
Conventional geothermal plants work by drilling deep into the earth to release hot brine, which produces steam to power turbines. The US Energy Information Administration notes that these projects emit about 99% less carbon dioxide than fossil fuel-based power.
Globally, geothermal capacity stood at 15.4 GW by the end of 2024, led by the United States, Indonesia and the Philippines. In Europe, Germany has stepped up development, while in the US, technology companies have been seeking low-carbon electricity options for data centres and AI-driven growth.
In India, state-run ONGC had earlier conducted geothermal exploration in Ladakh's Puga Valley, marking one of the country's first pilot projects. The new policy is also expected to accelerate such efforts and integrate them into the larger clean energy mix.
Source: Reuters
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