Geothermal Energy in India: Exploring the Potential and Future Prospects

India sits atop a vast reserve of underground heat – and for the most part, it has barely scratched the surface. While solar and wind energy dominate the country’s renewable conversation, geothermal energy remains a largely untapped resource that could deliver something those two sources cannot: round-the-clock, weather-independent power. With over 380 identified hot spring sites spread across the country and an estimated potential of 10.6 gigawatts (GW), India’s geothermal future is no longer just theoretical – it’s beginning to take shape.

What is geothermal energy and why does it matter for India? 🔗

Geothermal energy harnesses heat from the Earth’s interior – from hot springs, steam vents, and underground reservoirs – to generate electricity or provide direct heating. Unlike solar panels that go dark at night or wind turbines that stall in calm weather, geothermal plants run 24 hours a day, 365 days a year. They also emit roughly 80% less greenhouse gases than coal and oil, and require far less land per unit of energy produced compared to solar or wind installations.

For a country like India – grappling with energy poverty in remote regions, soaring electricity demand, and ambitious net-zero targets – geothermal energy offers a compelling complement to its renewable energy basket. The question isn’t whether India has the resource. It’s whether India has the infrastructure, policy, and investment to use it.

India’s geothermal potential and key sites 🔗

Geothermal exploration in India began as far back as 1973, when the Geological Survey of India (GSI) first identified hot spring locations and geothermal hotspots across the country. Since then, researchers have mapped ten distinct geothermal provinces, from the Himalayan belt to the Andaman and Nicobar Islands. The GSI has identified 381 hot springs with surface temperatures ranging from 35°C to 89°C. The Himalayan belt, in particular, hosts high-temperature reservoirs approaching 200°C – rare and highly valuable for electricity generation.

Puga Valley, Ladakh 🔗

Puga Valley is widely considered India’s most promising geothermal site. Located in the south-eastern part of Ladakh at an altitude of around 14,000 feet, it lies at the collision point of the Indian and Asian tectonic plates – a geologically active zone marked by hot springs, mud pools, geysers, and deposits of sulphur and borax. Drilling by the Oil and Natural Gas Corporation (ONGC) in 2022 found temperatures of 180-190°C at just 40 metres below the surface – far higher than expected, and a strong indicator of the site’s energy viability.

Experts estimate that Puga Valley could support a power generation capacity of 250-300 MW. A modest 20-25 MW plant, according to former GSI director Ahsan Absar, could meet around 40% of the energy needs of the Ladakh valley. This matters enormously for a region where hydropower plants frequently shut down in winter due to frozen rivers, leaving communities without reliable electricity for months.

ONGC signed a Memorandum of Understanding with the Ladakh Autonomous Hill Development Council in 2021 to develop a 1 MW pilot plant as Phase 1, with plans to scale up to 100 MW in advanced stages. Drilling resumed in 2024 after being temporarily halted following a geothermal fluid release incident in 2022. Beyond electricity, the project holds potential for district heating, greenhouse farming, and even green hydrogen production.

Cambay Graben, Gujarat 🔗

The Cambay Graben in Gujarat is another high-priority site, identified as a geothermal prospect for power generation since early surveys in the 1970s. What makes it particularly attractive is the presence of thousands of abandoned oil and gas wells in the region. These existing boreholes can potentially be repurposed for geothermal energy extraction, significantly reducing the cost of new drilling. Norwegian and Icelandic companies have already begun exploring pilot projects in the Gulf of Cambay, and MNRE has sanctioned projects in the area, including one backed by Vedanta’s Cairn Oil & Gas.

Other significant sites 🔗

India’s geothermal map extends well beyond Ladakh and Gujarat. Tattapani in Chhattisgarh is known for its active hot springs and has been the subject of exploratory research. Manikaran in Himachal Pradesh and Chumathang in Jammu & Kashmir are also part of the Himalayan geothermal belt. In the northeast, geothermal heating is already being used at an army base in Tawang, Arunachal Pradesh – a small but meaningful real-world application. The Andaman and Nicobar Islands, sitting on active tectonic boundaries, also hold significant untapped potential.

Government policies and goals for geothermal energy 🔗

India’s policy engagement with geothermal energy has evolved considerably over the years, moving from exploratory surveys to formal national frameworks. The Ministry of New and Renewable Energy (MNRE) has been the key driver of this shift.

Early targets and the draft framework 🔗

An early draft geothermal development framework set out targets of 1,000 MW by 2022 and 10,000 MW by 2030. These targets reflected strong ambition but proved difficult to achieve given the absence of a formal regulatory structure, limited R&D investment, and the dominance of solar and wind in India’s renewable energy planning. The 1,000 MW target for 2022 was not met, largely because geothermal lacked the dedicated institutional support that solar energy enjoyed through schemes like the National Solar Mission.

National Policy on Geothermal Energy 2025 🔗

A major turning point came in September 2025, when MNRE notified India’s first National Policy on Geothermal Energy, directly supporting the country’s net-zero mission. The policy is comprehensive in scope. It maps geothermal potential across 10 provinces, establishes MNRE as the nodal implementing agency, and introduces a range of fiscal incentives including GST exemptions, import duty relief, tax holidays, accelerated depreciation, and viability gap funding (VGF). The policy also mandates single-window clearance systems at the state level to speed up project approvals and allows 100% Foreign Direct Investment (FDI) in the sector.

The revised near-term target under the 2025 policy is 1,000 MW of geothermal capacity by 2030, with a longer-term vision of scaling this significantly. The International Energy Agency (IEA) projects India’s geothermal capacity could reach 4.2 GW by 2035 and approach 100 GW by 2045, placing India among the world’s top three nations for next-generation geothermal potential alongside China and the United States.

The policy also encourages hybrid systems – combining geothermal with solar – and promotes geothermal’s use beyond electricity, covering district heating, cold storage, greenhouse agriculture, aquaculture, desalination, and even geo-tourism around hot spring sites.

Challenges and opportunities for growth 🔗

Despite its enormous promise, geothermal energy development in India faces a set of real and persistent barriers. Understanding these is key to assessing how quickly the sector can actually scale.

High upfront costs and exploration risk 🔗

Drilling deep into the Earth is expensive. Upfront costs are estimated at around ₹36 crore per megawatt of capacity – significantly higher than solar or wind at equivalent scales. Unlike solar panels, where most of the cost is in equipment that can be assessed before purchase, geothermal requires drilling before you know what you’ll find. If a well turns out to be geologically unviable, that investment is lost. This exploration risk makes private investors cautious and has historically limited financing options for geothermal projects in India.

The Cambay Basin pilot, for instance, was stalled due to financial non-viability despite initial interest, and the Cambay joint venture between ONGC and Talboom was suspended in 2012 over regulatory delays and unresolved land-use rights. The 2025 policy’s VGF mechanism and risk-sharing frameworks with oil and gas companies are designed to address exactly this problem.

Technical and infrastructure barriers 🔗

India’s highest-potential geothermal sites are concentrated in geologically active zones – primarily along tectonic boundaries in the Himalayas, far from population centres and the national grid. Sites like Puga in Ladakh face challenges of extreme altitude, difficult terrain, and limited infrastructure, making power evacuation costly. The 2022 drilling incident at Puga – where unexpectedly high fluid pressures caused a wellhead blowout and released geothermal fluid into a local stream – also highlighted the need for more advanced equipment and robust environmental protocols before operations can scale up.

India also has a limited pool of trained geothermal professionals. Unlike solar and wind, which have built a substantial domestic industry over two decades, geothermal remains a nascent field with minimal dedicated R&D funding. The 2025 policy’s proposal to establish Geothermal Centres of Excellence is a direct response to this gap.

Environmental and social considerations 🔗

Geothermal development is not without environmental trade-offs. Improper drilling can release hazardous minerals and gases, contaminate groundwater, and in seismically active zones, potentially trigger minor tremors. At Puga Valley specifically, there are concerns about the impact on nearby wetlands, including Tsomoriri Lake – a Ramsar-designated site that serves as a breeding habitat for globally threatened bird species. Local communities like the semi-nomadic Changpa tribe have voiced concerns about the loss of pastureland, even as they welcome the prospect of jobs and reliable electricity.

These tensions are not unique to India, but they underscore the importance of community consultation and environmental impact assessments being integrated into project planning from the outset – not as afterthoughts.

The opportunity: a reliable baseload complement to solar and wind 🔗

Despite the challenges, the case for geothermal development is strong. India’s solar and wind sectors, while growing rapidly, are intermittent by nature. Geothermal energy fills a critical gap as a baseload renewable – one that generates power continuously, regardless of weather or time of day. In regions like Ladakh, where solar output drops sharply in winter and hydropower is seasonally limited, geothermal offers a uniquely stable energy source.

The repurposing of abandoned oil wells in Cambay and Gujarat also presents a cost-effective pathway to early development. These existing boreholes reduce the need for fresh drilling expenditure and leverage the oil sector’s existing technical expertise – a practical bridge between India’s fossil fuel past and its clean energy future. Meanwhile, international interest from firms in Iceland, Norway, and the United States signals growing confidence in India’s geothermal sector as a viable investment destination.

The road ahead 🔗

India’s geothermal journey is still in its early chapters. The country’s first commercial-scale geothermal power plant has yet to be commissioned. But the combination of a formal national policy, active pilot projects, international partnerships, and a growing recognition of geothermal’s unique advantages marks a genuine inflection point. The National Policy on Geothermal Energy 2025 provides the regulatory scaffolding the sector has long needed. Whether that translates into megawatts on the grid will depend on how effectively India can reduce exploration costs, build technical capacity, protect sensitive ecosystems, and mobilise private capital at scale.

The heat is there. India now needs to harness it.

What do you think? Given that India already has strong solar and wind sectors, should geothermal energy be prioritised for remote, energy-deficient regions first – or does it deserve a place in the national grid strategy as a mainstream baseload source? And with environmental sensitivities at sites like Puga Valley, how should India balance clean energy development with the protection of fragile Himalayan ecosystems?

References

1. https://vajiramandravi.com/current-affairs/indias-new-geothermal-energy-policy/
2. https://dialogue.earth/en/energy/geothermal-energy-could-light-up-rural-ladakh/
3. https://www.drishtiias.com/daily-updates/daily-news-analysis/geothermal-power-in-ladakh
4. https://corporate.cyrilamarchandblogs.com/2025/10/turning-up-the-heat-indias-first-national-geothermal-energy-policy-unveiled/
5. https://www.10net.in/2024/07/25/ladakhs-energy-breakthrough-work-on-indias-first-geothermal-power-project-begins-in-puga-valley/
6. https://www.thinkgeoenergy.com/ladakh-india-geothermal-project-to-resume-work-in-2024/
7. https://www.thinkgeoenergy.com/india-sets-ambitious-target-for-geothermal-development-by-2030/
8. https://www.insightsonindia.com/2025/09/18/national-policy-on-geothermal-energy-2025/
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11. https://dialogue.earth/en/energy/prospects-and-challenges-of-indias-first-geothermal-plant/