Geothermal projects may get funding after assessment

New Delhi: The government may consider a national level programme to financially support geothermal projects after assessing their viability and technical feasibility, the renewable energy ministry said on Wednesday.

This follows notification of the National Policy on Geothermal Energy (2025), to promote harnessing the earth's internal heat to generate renewable energy and support the country's 2070 net zero goal. The policy, released on Monday, outlined resource assessment, pilot projects deployment, capacity building, and the broad contours of the way forward.

Initially, the policy will encourage pilot projects and issue detailed guidelines with standard operating procedure for adding geothermal projects, the ministry said in a statement. Currently, pilot projects are in the works and the technology itself is considered expensive on a global level. "A detailed national-level programme may be considered for development subsequently for providing financial and fiscal support," the ministry said.

The technical and commercial viability of the technology needs to be established, renewable energy secretary Santosh Kumar Sarangi told the media. The ministry is yet to assess the amount of financial support for such projects, he said.

Initial estimates suggest such a project will cost roughly ₹36 crore per megawatt, but as it scales up the cost will come down and be competitive, Sarangi said.\ "May be in the first few projects the government may have to chip in with VGF (viability gap fund) like in solar and wind," he said. "So, that assessment will be known only after operationalising a few thermal heat-to-energy plants. Right now, we have none to assess." According to the policy, the renewable energy ministry may explore supporting the technology through financing mechanisms and fiscal measures such as long-term concessional loans, viability gap funding, tax and import-related measures, and regulatory support, the ministry said.