Govt to push geothermal pilots under new policy; Iceland, Norway firms eye sites in Uttarakhand, Arunachal

“Some Norwegian and Icelandic research companies have shown interest in the Gulf of Cambay, Arunachal Pradesh, and Uttarakhand. They have even sent their teams to do some pilot studies. There is a lot of interest,” Sarangi said in a media briefing. Additionally, the government will also explore technological collaborations with the US and Indonesia, especially for enhanced geothermal systems for larger power plants.

India has an estimated 10.6 gigawatts (GW) of geothermal potential, which could rise with further exploration. Key sites lie in the Himalayan Geothermal Province — covering Uttarakhand, Himachal Pradesh, Ladakh, Jammu and Kashmir, and Arunachal Pradesh — as well as the Cambay Graben in Gujarat, home to several abandoned oil wells, and the Andaman and Nicobar Islands.

Globally, less than 17 GW of geothermal capacity is harnessed, led by the US, Indonesia, and the Philippines, while countries like Iceland and Norway have pioneered innovative technologies in the sector.

In June 2024, the US International Trade Administration (ITA) said, “Puga and Chumathang in eastern Ladakh seem to be the most promising geothermal fields in India. Efforts are also being made to utilize geothermal energy from existing oil and gas wells in ONGC’s Gandhar oil field in Ankleshwar, Gujarat, followed by Cambay Basin in Gujarat.” It called on American companies to “explore opportunities in the Indian market, where geothermal energy is being viewed as a supplemental solution to energy storage and available backup options.”

According to the International Energy Agency (IEA), “China, the US and India have the largest market potential for next-generation geothermal electricity, together accounting for three-quarters of the global total.” The IEA estimates India’s geothermal market potential to grow to 4.2 GW by 2035 and nearly 100 GW by 2045.

“With geothermal energy, we can provide electricity and heating in the hard-to-reach areas of the country. For instance, in the Andaman and Nicobar Islands, power currently costs Rs 30-32 per unit; with geothermal energy, it could fall to below Rs 10-11. Similarly, in Ladakh, where heating is essential during peak winters, tapping geothermal resources could provide both heating and electricity,” the MNRE Secretary said.

“Also, in the Gulf of Cambay, there are thousands of abandoned oil wells. The drilling has been done, but the heat generated from there is not being used today,” he added.

Oil and gas companies are increasingly looking to repurpose abandoned wells for geothermal energy. In Barmer, Rajasthan, IIT Madras is piloting a project to retrofit unproductive oil wells to generate 450 kilowatt-hours (kWh) of electricity, with support from MNRE and Vedanta Ltd’s Cairn Oil & Gas. Reliance Industries Ltd, in its 2024-25 annual report, also said it plans to leverage its oil and gas exploration and production business to expand into geothermal.

Geothermal energy faces high upfront costs and exploration risks — it takes about Rs 36 crore to develop one megawatt (MW) of capacity. The National Policy on Geothermal Energy aims to financially support R&D and pilot projects, along with streamlining efforts across stakeholders, including the Ministry of Petroleum and Natural Gas and state governments. A viability gap funding (VGF) scheme is also being explored.

“The challenge is to demonstrate commercial feasibility, and that experiment is already under way. The policy’s framework will allow us to carry out the technical as well as commercial design needed for it,” Sarangi said. The MNRE has sanctioned five projects so far, including the one supported by Vedanta, and with the policy, it expects to expand the list.

The policy comes after a task force on harnessing geothermal energy in India was formed by the MNRE in August 2024.