National Policy on Geothermal Energy, 2025 Issued

In a significant step toward diversifying India’s renewable energy portfolio, the Ministry of New and Renewable Energy (MNRE) issued the National Policy on Geothermal Energy, 2025 on September 15, 2025. The policy is designed to harness geothermal energy, largely untapped resource in India as part of the country’s long-term strategy to meet its Net Zero 2070 commitment. With a geological base that offers promising geothermal provinces and with coal and oil infrastructure ripe for repurposing, the policy introduces a structured framework to support exploration, innovation, and deployment of geothermal technologies.

Key Objectives

The policy envisions geothermal energy as an intrinsic source of clean, reliable power and a tool for wider direct-use applications. Its primary objectives include:

1. Enhance Geothermal Research and Innovation: Strengthen R&D in exploration, drilling, reservoir management, power generation, and direct-use technologies.
2. Integrate Global Best Practices: Collaborate with ministries, international bodies, and research institutes to adopt proven technologies and methods.
3. Accelerate Deployment of Direct-Use Technologies: Promote geothermal heating and cooling systems like GSHPs to decarbonize buildings, agriculture, and industry.
4. Collaborate with Oil & Gas Sector: Use deep drilling techniques and repurpose abandoned wells for scalable geothermal power in India.
5. Develop a Strong Public-Private Ecosystem: Encourage partnerships and investments to support long-term geothermal sector growth.
6. Build Capacity and Share Knowledge: Invest in training, skill development, and knowledge exchange across the geothermal value chain.

The policy defines a wide ambit for geothermal activities, recognising its potential across multiple domains:

1. Resource Assessment: Geological, geochemical, and geophysical surveys, alongside exploration drilling, aligned with global standards such as the United Nations Framework Classification (UNFC)for Geothermal Energy.
2. UNFC classification for geothermal energy.
3. Drilling Operations: Regulation of shallow and deep geothermal drilling based on depth, extraction methods, and subsurface characteristics.
4. Power Production: Deployment of dry steam, flash steam, binary cycle, and Organic Rankine Cycle (ORC) plants, with scope for modular and scalable Enhanced Geothermal Systems (EGS).
5. Direct Applications: Use of low-temperature wells or hot springs for cold storage, greenhouses, aquaculture, food processing, tourism, wellness centers, and district heating/cooling.
6. Ground Source Heat Pumps (GSHPs): Utilizing stable subsurface temperatures for space heating, cooling, and drying, deployable across diverse climatic zones.
7. Emerging Technologies: Promotion of advanced systems such as Advanced Geothermal System (AGS), Enhanced Geothermal Systems (EGS), hybrid solar–geothermal plants, closed-loop systems, geothermal storage, offshore wells, and deep direct-use for industrial heating and desalination.
8. Repurposed Oil & Gas Wells: Leveraging abandoned wells for geothermal energy projects, drawing on existing expertise and data from the oil and gas sector.
9. By-products: Allowing incidental extraction of valuable minerals like lithium, silica, and borax during geothermal operations, subject to MMDR Act approvals and royalty payments.

This expansive scope reflects the policy’s intention to integrate geothermal not only as a power source but also as a driver of industrial and commercial applications.

India’s geothermal potential is estimated at 10 GW, with 10 identified provinces including the Himalayan Geothermal Province, Naga-Lusai, the Andaman & Nicobar Islands, and the Son Narmada-Tapi region among others.

The policy envisages:

1. development of detailed guidelines and standard operating procedures (SOPs) for project implementation,
2. potential subsidy mechanisms such as viability gap funding (VGF), sovereign green bonds, tax facilitation, and import duty support to improve bankability,
3. 100% FDI under the renewables framework, with preference for indigenous technologies for reduction of dependency on imports, and
4. facilitation of data-sharing through a central geothermal data repository.

The geothermal policy represents more than just an addition to India’s renewable energy mix. It:

1. aligns clean energy expansion with India’s Net Zero 2070 pathway,
2. creates new market opportunities for industries to access stable and non-intermittent power,
3. enhances energy security by diversifying sources beyond solar, wind, and hydropower, and
4. supports a shift toward sustainable district-level solutions, such as heating and cooling for urban and agricultural applications.

The National Policy on Geothermal Energy, 2025 lays the foundation for a new frontier in India’s renewable energy landscape. By focusing on research, pilot demonstrations, partnerships, and regulatory clarity, the government is positioning geothermal energy as both a technological opportunity and a climate solution. If implemented with the right financial and regulatory support, geothermal could emerge as a steady and transformative contributor to India’s clean energy transition.