GS 3 – Environment
Context
The Ministry of New and Renewable Energy (MNRE) has launched India’s first national geothermal energy policy, aiming to diversify the country’s renewable energy basket beyond solar and wind, and to accelerate progress toward net-zero by 2070.
Key Features of the Policy
- 100% Foreign Direct Investment (FDI):
Full foreign investment allowed in geothermal projects to boost capital inflow and technology transfer. - Fiscal Incentives:
- Tax holidays for geothermal energy developers.
- Import duty exemptions on drilling equipment and technology.
- Concessional loans to reduce upfront capital burden.
- Viability Gap Funding (VGF) to support financially challenging projects.
- Project Tenure:
Support provided for up to 30 years, extendable depending on resource availability. - Industry Collaboration:
Encourages joint ventures with oil, gas, and mineral companies to leverage existing expertise in subsurface exploration. - Repurposing Infrastructure:
- Conversion of abandoned oil and gas wells for geothermal energy extraction.
- Deployment of ground source heat pumps for heating and cooling purposes in urban and industrial setups.
Significance for India
- Ultra-Low Emissions:
Geothermal power emits ~99% less CO₂ than fossil fuel-based power plants. - Global Market Expansion:
- Global geothermal capacity in 2024: 15.4 GW
- Leading nations: United States, Indonesia, Philippines
- India aims to enter this expanding market with scalable projects.
- Net-Zero Commitment:
Reduces dependence on solar and wind by adding base-load renewable energy, supporting India’s net-zero target by 2070. - Stable Energy Supply:
Ideal for industrial hubs, urban centers, and emerging energy-intensive sectors like AI-driven data centres that require 24/7 reliable power. - Resource Availability:
- India has mapped 381 hot springs across 10 geothermal provinces.
- Major regions: Ladakh, Himachal Pradesh, Gujarat.
- Potential for both electricity generation and direct-use applications like district heating, greenhouse heating, and aquaculture.
Challenges Ahead
- High Initial Costs:
Deep drilling and advanced exploration are capital-intensive, requiring heavy upfront investment. - Resource Risk:
Uncertainty in geothermal reservoir potential until exploration is complete. - Policy Execution:
Success depends on effective coordination between MNRE, state governments, and private investors. - Limited Awareness & Expertise:
Need for technical training, regulatory frameworks, and market awareness to attract large-scale participation.
Way Forward
- Pilot Projects:
Launch demonstration projects in Ladakh, Himachal Pradesh, and Gujarat to prove technical and financial feasibility. - Integration with District Heating & Cooling:
Use geothermal energy in urban heating and industrial cooling systems to expand direct-use applications. - International Collaboration:
Build partnerships with global renewable energy majors and Big Tech companies for investment, technology transfer, and scaling. - Policy Alignment:
Synchronize with state renewable energy policies to create a seamless regulatory ecosystem.