India’s renewable energy growth is vital for achieving ambitious climate change targets and the 2070 Net Zero Goal. While solar, wind, bioenergy, and hydropower dominate renewable energy capacity, India’s geothermal potential, rooted in its unique geological settings, remains largely untapped. The policy was officially notified by the Ministry of New and Renewable Energy (MNRE) on September 15, 2025. It aims to facilitate the exploration, development and production of geothermal energy, making geothermal energy a significant additional resource in the country’s renewable energy landscape. Geothermal energy is included under the ministry’s Allocation of Business Rules, and its harnessing becomes crucial as India’s transition to renewable energy is central to national climate commitments and energy security. The ministry shall retain regulatory and stewardship responsibilities for geothermal energy.
Geothermal energy refers to the heat stored within the Earth’s crust. Earth grows progressively hotter with increasing depth, and where the geothermal gradient is high, high temperatures are found at shallow depths. High-enthalpy resources associated with volcanic regions, geysers, and hot springs are primarily used for electricity generation. Low-to medium-enthalpy resources, such as hot rocks and shallow ground layers, are suited for a wide range of direct-use applications including heating and cooling, agri-food, aquaculture, and geothermal heat pumps. A geothermal system consists of production and reinjection components, such as wells and pumps; transport components such as pipelines; distribution components such as heat exchangers; and various end-use applications. This energy source offers 24/7 electricity generation, reliable baseload supply, enhanced grid stability, lower life-cycle greenhouse gas emissions and improved energy security, especially in remote and inaccessible areas. For the oil and gas industry, geothermal resources provide opportunities to apply drilling expertise and repurpose idle wells, supporting the low-carbon transition.
The primary applications of geothermal energy include electricity generation, and direct use for district heating, greenhouses, aquaculture, food drying, industrial processes and geo-tourism, as well as space heating and cooling through ground source heat pumps. These heat pumps operate with shallow ground temperatures of about 10–25 °C and deliver efficient heating and cooling for buildings. Geothermal energy is also suitable for geo-tourism, greenhouse heating for agri-businesses, drying of horticulture produce, cold storage, desalination, and retrofitting abandoned oil wells for geothermal production.
Globally, geothermal power generation capacity stood at 15.4 gigawatts at the end of 2024, with the US as the leader, followed by Indonesia and the Philippines. A figure of 17.35 gigawatts of geothermal power production has been estimated by business analysts like Mordor Intelligence and Research and Markets, showing a steady growth from 15.4 gigawatts of geothermal power production data from 2024. Still, less than 17 gigawatts of geothermal capacity is harnessed worldwide, while Iceland and Norway have pioneered innovative technologies. The International Energy Agency (IEA) notes that China, the US, and India have the largest market potential for next-generation geothermal power. It also estimates that India’s geothermal market potential could grow to 4.2 gigawatts by 2035, and nearly 100 gigawatts by 2045.
Geothermal development faces challenges primarily related to high upfront costs and exploration risks. It takes about Rs 36 crore to develop one megawatt of capacity, which necessitates policy mechanisms to engage private and public sector investment through incentives, subsidies, risk mitigation, and streamlined regulatory processes. Considering its utility as a substitute for both heat and energy sources, MNRE has formulated the National Policy on Geothermal Energy to enable the exploration and development of untapped geothermal energy resources. The Policy shall be followed by all stakeholders, including the ministers, state governments, public and private companies, agencies, academia, entrepreneurs, and startups. The central and state governments may issue additional guidelines or incentives to support geothermal energy development. Relevant Acts and Regulations, such as the Oilfields (Regulation and Development) Act, the Mines and Minerals (Development and Regulation) (MMDR) Act, the Environment (Protection) Act, the Electricity Act, the Forest (Conservation) Act, the Wildlife (Protection) Act, and the Water (Prevention and Control of Pollution) Act shall be applicable, depending on the location of the project.
Vision and Goals
The vision of the National Policy on Geothermal Energy 2025 is to establish geothermal energy as one of the major pillars of India’s renewable energy landscape; it encompasses several strategic goals, such as contributing significantly to national climate commitments and the ambitious 2070 Net Zero Goal, and long-term energy security, while building a sustainable, secure, and responsible geothermal energy sector.
The policy aims to strengthen India’s technical and institutional capabilities for geothermal development by advancing the research capabilities on geothermal resource assessment, drilling techniques, reservoir management, and cost-effective power generation, and direct-use technologies. It seeks collaboration with ministries, international geothermal development bodies, and national research institutions, such as Geological Survey of India (GSI), Council of Scientific and Industrial Research—National Geophysical Research Institute (CSIR-NGRI), and the Ministry of Earth Sciences, to incorporate global best practices in exploration, resource assessment and technology deployment. It aims to deploy geothermal heating and cooling solutions, including ground-source heat pumps to decarbonise buildings, agriculture, and industries. It further focuses on advanced geothermal exploration involving deep and multilateral drilling, and repurposing abandoned wells for large-scale power generation. Building a robust public-private ecosystem, along with capacity building and knowledge sharing, forms a core objective of the Policy, supported under MNRE’s Renewable Energy Research and Technology Development (RE-RTD) Programme.
Cost of Geothermal Power Plants
Geothermal power projects are capital-intensive and site-specific. Their costs include exploration, resource assessment, drilling of production and injection wells, field infrastructure, geothermal fluid collection and disposal systems, surface installations, project development costs, and grid connection costs. These costs vary by location due to differences in well productivity, the type of power plant—such as Organic Rankine Cycle (ORC), dry steam, flash—or binary—and geothermal field characteristics. Geothermal plants have no fuel cost, and only operational and maintenance expenses. They typically achieve high-capacity utilisation factors above 80 per cent, which makes them a reliable baseload renewable power source.
Geothermal Potential in India
Since 1973, the Geological Survey of India (GSI) has identified 381 hot springs with surface temperatures ranging from 35 °C to 89 °C. India generally falls within a medium-to low-heat- enthalpy zone, with resource temperatures of 100 °C to 180 °C. Himalayan regions could reach reservoir temperatures of around 200 °C, making them suitable for multiple applications including the ground source heat pumps, greenhouse heating, and cold storage.
India’s 10 geothermal provinces identified by GSI include the Himalayan Geothermal Province, Naga-Lusai, Andaman Nicobar Islands, Son-Narmada Tapti, West Coast, Cambay Graben, Aravalli, Mahanadi, Godavari, and the South Indian Cratonic region.
Important geothermal sites include Puga, Chumathang, Gaik, Demchok, and Nubra in Ladakh; Sidhu in Jammu and Kashmir; Manikaran, Kasol, and Tattapani in Himachal Pradesh; Tapovan, Gaurikund, Joshimath, and Yamunotri in Uttarakhand; Tshachu, and Takshing in Arunachal Pradesh; Polok and Yumesadong in Sikkim; Sohna in Haryana; Bhimbund in Bihar; Surajkund and Tantloi in Jharkhand; Bakreshwar in West Bengal; Tattapani in Chhattisgarh; Anhoni in Madhya Pradesh; Dholera, Tuwa, and Tulsishyam in Gujarat; Deulajhari and Attri in Odisha; Unhavare, Sativali, and Tural in Maharashtra; and Manuguru in Telangana.
Geothermal rift basins have high geothermal potential due to geological features and tectonic frameworks, although projects could be established across many suitable sites.
The ministry shall facilitate the creation of a geothermal resource data repository through inter-governmental and inter-agency collaboration. Relevant partners include the Ministry of Mines, the Ministry of Earth Sciences, Directorate General of Hydrocarbons (DGH), GSI, National Data Repository (NDR), Central Ground Water Board (CGWB), CSIR-NGRI, and the Oil & Gas industry for well data and equipment sharing. The DGH Data Repository may be made available to eligible operators for geothermal prospective analysis under National Data Repository procedures. Operators shall submit all the acquired geothermal data to the designated repository upon completion of the surveys. Developers will carry out detailed resource assessments and techno-economic feasibility studies to inform project design and investment.
Scope of Geothermal Energy Systems
The Policy covers geothermal resource assessment through geological, geochemical, and geophysical surveys, as well as exploratory drilling and all activities will be standardised with international norms, including the United Nations Framework Classification (UNFC). Geothermal drilling would be regulated based on the depth, extraction technology, and subsurface characterisation. Geothermal power production systems include dry steam, flash steam, binary cycle, and ORC plants. Enhanced geothermal systems may be developed for extracting heat from hot rocks where natural water flow is absent.
Direct use of geothermal energy from low-temperature wells or hot springs could support various sectors, including cold storage the paper pulp industry, fruits and vegetable drying, food processing, green-housing, aquaculture, bathing centres, tourism, skin care centres, geothermal, and botanical parks. Ground source heat pumps (GSHPs), which uses Earth’s constant temperature (typically between 16 °C and 30 °C) at shallow depths, can provide cooling, drying and space heating, making them effective across all climate zones. Emerging technologies such as hybrid geothermal power systems integrated with solar PV or solar thermal, closed-loop systems, geothermal energy storage, offshore geothermal wells and deep direct-use applications are included. Extracting geothermal energy from abandoned oil and gas wells leverages drilling skills and existing data. Valuable mineral byproducts, such as silica, borax, caesium, and lithium may be extracted subject to the MMDR Act.
Developmental Model for Deployment
Geothermal power plant development includes surface exploration, environmental assessment, exploration drilling, feasibility studies and resource assessment, production well drilling, design and construction, commissioning and testing, well monitoring, reservoir management and operation. One hundred per cent foreign direct investment (FDI) is allowed in renewables in India. Preference shall be given to indigenous geothermal technologies to reduce dependency on imported equipment. Technology enabling safe, non-polluting use, and reinjection of geothermal fluids shall be preferred. Central funding assistance may prioritise the northeastern region and special category states. Conversion of abandoned wells into geothermal plants would be prioritised through collaboration with the Ministry of Petroleum and Natural Gas (MoPNG), DGH, and oil companies.
Joint ventures between oil and gas companies, mineral companies, and geothermal developers could combine expertise and financial resources for geothermal development. Existing oil and gas facilities may be repurposed to minimise the capital investment. Financing mechanisms include support under the MNRE Research and Development Scheme, donor funding, concessional loans, sovereign green bonds, viability-gap funding, risk-mitigation grants, feed-in-tariffs, and long-term loans. Fiscal mechanisms, such as import duty exemptions, GST exemptions, tax holidays, accelerated depreciation, and property tax exemptions may be explored.
Support mechanisms for power production, transmission and distribution shall apply to geothermal projects including Inter-State Grid Access, Inter-State Transmission System (ISTS) transmission waiver, Open Access charges waiver, Renewable Energy Must-Run Rules, Renewable Purchase Obligation (RPO) eligibility, and Carbon-credit trading. Ground source heat pumps and district heating may be promoted under the National Building Code. Environmental and social impact-assessment guidelines may be developed drawing on best international practices.
Guidelines for States and Union Territories
Project developers may approach state governments for the allocation of potential geothermal zones, blocks, or sites. Exploration permits and land leases may be provided by the state governments. In areas overlapping with existing oilfields, proposals would be evaluated on merit and coordinated with MoPNG. States shall streamline permitting through a single-window support system, designate a nodal agency for the permissions and clearances, and facilitate access to land and transmission. Developers must adhere to land-allotment, environmental and social clearances, and conduct stakeholder consultations with compensatory measures in tribal and remote areas.
States may allocate geothermal sites for exploration for three years with provisions for extension (including additional extension options for high-altitude areas with limited working windows) particularly for high-altitude areas with limited working windows. Sites may be allocated for development for up to thirty years. Concessional land allotment may be provided, and defence clearance may be taken wherever required.
Implementation of the Policy
The MNRE shall serve as the nodal ministry for the geothermal projects. Technology collaboration with pioneering countries would be explored along with partnerships with multilateral donor organisations and development finance institutions. Under the MNRE R&D Scheme, projects on detailed resource assessment and pilot projects on power production and direct use shall be taken up. Soft loans may be provided by Indian Renewable Energy Development Agency (IREDA) and other financial institutions. Centres of Excellence in geothermal energy may be established for technical support, capacity building, and implementation. The ministry would release periodic progress reports and may issue detailed standard operating procedures for the geothermal project implementation.
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