Government Considers National Program to Support Geothermal Energy Projects
The Indian government is contemplating a national program to financially back geothermal energy projects following the announcement of the National Policy on Geothermal Energy 2025. This policy aims to promote the use of the Earth's internal heat for renewable energy and contribute to the nation's net-zero goal by 2070. Initial efforts will focus on pilot projects and developing standard guidelines, though the technology's high costs remain a concern. Financial support mechanisms may include concessional loans and viability gap funding, pending assessments of project viability.
Theia Market Signal Identification - AI AssistedIn a significant move towards renewable energy, the Indian government is exploring the establishment of a national program to provide financial support for geothermal projects, contingent upon a thorough evaluation of their viability and technical feasibility. This initiative follows the recent announcement of the National Policy on Geothermal Energy 2025, which aims to harness geothermal resources for energy generation and aid in achieving the nation's ambitious goal of net-zero emissions by 2070.
The newly released policy emphasizes the need for resource assessment and the initiation of pilot projects, alongside a framework for capacity building and future development strategies. The Ministry of Renewable Energy has stated that initial efforts will focus on encouraging pilot projects and developing comprehensive guidelines to standardize the implementation of geothermal initiatives.
However, the technology's high costs are a significant hurdle. Estimates indicate that geothermal projects could initially cost around 36 crore per megawatt. Yet, as these projects scale, costs are expected to decrease, making them more competitive in the energy market. Renewable Energy Secretary Santosh Kumar Sarangi emphasized the importance of establishing the technical and commercial viability of geothermal technology, which remains untested in India due to the absence of operational thermal heat-to-energy plants.
To facilitate the rollout of these projects, the ministry is considering various financing mechanisms and fiscal incentives, including long-term concessional loans, viability gap funding, and regulatory support. The success of these initial assessments will determine the extent of government involvement in fostering geothermal energy as a viable alternative to conventional energy sources.
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