The government is exploring technology partnerships with the United States, Iceland, and Norway to develop the country’s geothermal energy sector, which has an estimated potential of around 10 GW, according to a senior government official.
Santosh Kumar Sarangi, Secretary at the Ministry of New and Renewable Energy (MNRE), said that researchers and experts from these countries have already visited several potential geothermal sites in India. They have expressed interest in offering technical expertise to help develop these locations into viable power generation hubs.
“Researchers from companies in Norway and Iceland have shown considerable interest in sites such as the Gulf of Cambay, Arunachal Pradesh, and Uttarakhand. They have already sent teams to conduct pilot studies,” said Sarangi.
Geothermal electricity is generated by harnessing heat from deep within the Earth and is considered a clean, reliable, and renewable energy source. The MNRE recently unveiled India’s first National Policy on Geothermal Energy, which outlines a strategic framework to promote and develop this renewable energy source as part of the country’s broader goal to achieve Net Zero emissions by 2070. The policy identifies 381 hot springs spread across ten geothermal provinces in regions such as the Himalayas, Naga-Lushai, Andaman & Nicobar Islands, the West Coast, Godavari Basin, Mahanadi Basin, and others.
The new policy encourages foreign investment by allowing 100 percent FDI in the sector. It also offers low-interest loans, grants to support failed drilling efforts, tax incentives for developers, long-term leases of up to 30 years, and fast-track clearances through a single-window system. Additionally, the government will provide viability gap funding to support early-stage geothermal projects and improve their commercial viability. As part of the initiative, the government has already sanctioned five geothermal projects. Speaking about the project costs, Sarangi said that detailed assessments have not yet been completed but initial estimation suggests that the cost of generation could be nearly Rs 10 per unit in the early stages. “It is roughly translating to Rs 36 crore per megawatt… the cost is expected to come down as the technology scales and more projects are developed,” said Sarangi.
He also mentioned that a 450 kW geothermal project using abandoned oil wells has been sanctioned in Rajasthan. These wells are owned by Vedanta.