The Ministry of New and Renewable Energy (MNRE) has released the National Policy on Geothermal Energy with the vision of making geothermal energy a key part of India’s renewable energy mix.
Among its key goals, the policy aims to strengthen research in areas such as geothermal energy development and deployment, drilling techniques, reservoir management, cost-effective power generation, and direct-use technologies. It also aims to collaborate with ministries, global geothermal bodies, and national research institutes. In addition, the policy also aims to promote geothermal heating and cooling solutions, such as ground source heat pumps (GSHP) and other direct applications, to reduce emissions in buildings, agriculture, and industries.
Furthermore, items/systems such as resource assessment, drilling, power production, direct use of geothermal energy, GSHP will be considered under the scope of this geothermal policy. The scope will also cover emerging innovative technologies and the extraction of geothermal energy from abandoned oil and gas wells.
MNRE will be the nodal agency and will focus on converting abandoned oil and gas wells into geothermal plants in collaboration with the Ministry of Petroleum and Natural Gas, the Directorate General of Hydrocarbons, and oil companies. Furthermore, equipment and materials procured under essentiality certificate for oil and gas operations can be directly utilised for geothermal projects. Additionally, economic feasibility, such as revenue sharing, milestone-based payments, will be explored by the government.
The government aims to improve the viability of geothermal projects by exploring different financing options. Support will be extended for geothermal research, resource assessment, and pilot projects under the MNRE research and development scheme on the Renewable Energy Research and Technology Development Programme. Foreign direct investment and funding from donor organisations, multilateral agencies, and philanthropic bodies will also be encouraged through grants, loans, or other mechanisms. Additionally, the government may consider options such as long-term concessional loans from public and private institutions, sovereign green bonds, viability gap funding, risk mitigation grants, and feed-in tariffs.
Additionally , the government may support the geothermal sector through fiscal measures such as import duty and GST exemptions on equipment and services, tax holidays for projects, accelerated depreciation, and property tax exemptions for GSHP/heating/cooling users. These measures will require approval from the relevant ministries and departments.
