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Government of India Ministry of New & Renewable Energy
INDIAN
GEOTHERMAL ENERGY DEVELOPMENT FRAMEWORK
Block No. 14, C.G.O. Complex Lodhi Road
New Delhi- 110003
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Indian Geo-thermal Energy Development Framework
1. Preamble
1.1 The energy scenario in India is fast changing with the emphasis given in the XIIth
Five Year Plan on renewable sources of energy. Though the dominance of fossil fuels,
viz. coal and oil will continue in the energy sector for the next few decades, the concern
for reducing the greenhouse gas emissions warrants increasing use of green energy/
renewable energy sources as a substitute to oil and coal. Solar energy and wind energy
are major contributors of the renewable energy as these resources are widely
distributed all over India and are available round the year. Geothermal energy is also an
additional source of renewable energy with site specific availability and potential for
consistent supply in all the seasons / throughout the year.
1.2 Geothermal Energy is heat stored in earth’s crust, which is manifested on surface
as hot springs and is being used worldwide since the beginning of the last century for
electricity generation and also for direct heat application. The global geothermal power
generation was at 13.3 Gigawatts (GW) in January, 2016, and if the current trend
continues, is projected to increase to 18.4 GW by 2021 and 32 GW by 2030 (www.geo-
energy.org). Top five leading countries in the geothermal power generation are USA
(3450 MW), Philippines (1870 MW), Indonesia (1340 MW), Mexico (1017 MW) and New
Zealand (1005 MW) as of 2015. The total installed capacity, reported in 2014 for
geothermal direct utilization worldwide is around 70.3 GWt and the leading countries
with the largest capacity of geothermal direct utilization are China, Sweden, USA,
Turkey, Iceland, Japan, Hungary, Italy and New Zealand. For harnessing geothermal
energy in India the Ministry of New & Renewable Energy (MNRE) has been supporting
R&D on exploration activities and Resource Assessment during last 25 years. This
includes formation of expert groups, working group, core group and committees in
addition to providing financial support for such projects and for resource assessment.
1.3 Government of India, Ministry of New and Renewable Energy (MNRE) has been
contemplating major initiative in deployment of geothermal technology for harnessing
the geothermal energy in the country during past few decades. Since geothermal
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electricity generation is characteristically site and technology specific and Indian
geothermal resources are mostly of low to medium enthalpy type, the Government is
planning to encourage the demonstration projects at the first stage to assess the
technical viability of the selected geothermal resources before going to the commercial
models.
1.4 Geothermal energy is a site specific renewable source of energy specifically
suitable for catering to the energy needs of remote/interior localities. Considering the
possible utility of geothermal energy as a substitute of heat as well as energy source
and the need of the hour to harness all possible sources of renewable energy, the
Ministry of New & Renewable Energy has formulated Development framework for the
exploration and development of geothermal resources in India, draft of which was
circulated in March, 2015.
1.5 This document will be termed as "Indian Geothermal Energy Development
Framework", henceforth called as "the Framework" in this document. The Framework
Guidelines are issued by the Ministry of New and Renewable Energy (MNRE), hereafter
called as "The Ministry", which controls the development and production of power from
new and renewable energy sources in India. Various State Government Agencies
representing the state governments would be called as "The State" henceforth. These
guidelines are to be followed by all the agencies, departments and entrepreneurs
associated with exploration and utilization of the geothermal resources. Geothermal
energy resource would be termed as "prospect" in this document. A private
entrepreneur interested in the development/exploration of geothermal resources will be
termed as "the entrepreneur". The Framework guidelines may be adopted/ Published
by states within 1 year from the date of issuance/notification. This framework is only
guidelines to facilitate state governments and entrepreneur for all geothermal related
projects development in India. Also guidelines would be reviewed after a period of three
years based on the feedbacks received from various stakeholders involved in
geothermal field.
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2. The Vision and Goals
2.1 As per the vision of Honorable Prime Minister on “24x7- Power For All”, the
Government is committed to bring about a transformative change in the power sector
and ensure affordable 24x7 power for all homes, industrial and commercial
establishments and adequate power for farms, in the next few years.
2.2 The geothermal Framework envisages to make a substantial contribution to
India’s long-term energy supply and reduce our national greenhouse gas emissions by
developing a sustainable, safe, secure, socially and environmentally responsible
geothermal energy industry, apart from creating new employment opportunities and
leading to environmentally sustainable development by the means of deployment of 20
MW(elect) and additional 1,000 MW(thermal) Geothermal Energy Capacity in the initial
phase till 2019 and 10,000 MW (thermal) and 500 MW(elect) by 2030. The demand of
electricity requirement can be mitigated by deploying Ground Source Heat Pumps
(GSHP’S) and retrofitting the existing HVAC systems with GSHP based system.
Geothermal Resource Assessment is being planned in 2016-2017 for public domain.
2.3 Ministry is planning to encourage the International Collaboration with the world
leaders in Geothermal Energy like USA, Iceland, Philippines, Indonesia, Mexico and
New Zealand for support to accelerate deployment of geothermal energy by
international investment promotion (100% FDI in RE Sector), customized capacity
building and technical assistance to key stakeholders, help in mitigating the exploratory
risk, technological support etc.
3. Definition and Scope
3.1 The following definitions of Geothermal shall apply for the purpose of this
Framework:
Geothermal energy is the heat stored in the earth crust, manifested on the surface by
hot springs and geothermal power is the electricity generated from this heat source.
This geothermal energy originates from various geological processes deep within earth
and radioactive decay of minerals. Drilling in hot spring areas yields geothermal fluid at
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high temperature and pressure with steam content varying from 0 to nearly 100%.
Geothermal Systems are also known as Hydrothermal Systems as these are
associated with natural convection system. Hydrothermal systems may be further
classified as liquid-dominated and vapor-dominated, depending on the ratio of steam to
water in the total discharge. Liquid-dominated hydrothermal systems, in turn, may be of
low, moderate or high temperature type and are the most common kind of geothermal
system being harnessed for power generation and various other off-grid applications.
Geothermal energy offers a number of advantages over traditional fossil fuel based
sources. The energy harnessed is clean and safe and it is sustainable too as the hot
water produced can be injected back to the reservoir after utilizing its heat content. In
addition, geothermal power plants are unaffected by changing weather conditions and
work on 24 x 7 basis round the year at an efficiency generally exceeding 90%. In the
last decade geothermal power generation has nearly doubled and it is now rated
economically competitive with other forms of energy. Geothermal plants are modular
and can be installed in incremental units as needed. Very small-scale kW level plants
are also feasible.
3.1.1 Classification of the geothermal energy resource and its mode of
extraction may be made using a variety of parameters. Such a classification would
allow the appropriate level of regulation to be applied to the different classes of
geothermal energy systems.
3.1.2 Parameters describing the resource and mode of extraction of available
geothermal energy like, depth, water temperature, flow rates, pressure, end use,
installed thermal capacity (in both heating and cooling mode) will be used to guide
the permitting process through which shallow and deep geothermal energy
exploitation will be regulated. These parameters will be used to distinguish between
shallow and deep resources. It is proposed that a single depth limit be used to
accurately define and differentiate shallow and deep geothermal resources
depending on country specific geological or hydrological conditions. Possible cut-
offs can be chosen from the following:
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a) Near surface resources to depth up to 500 m for GSHP wells for the purpose of
utilizing in GSHP and Geothermal Direct Use (GDU).
b) Shallow geothermal resources can be defined as those occurring in the depth
range of 500m to 1000m.
c) Deep geothermal resources can be defined as those occurring between the
depths of 1000m to 2000m.
d) Ultra Deep resources can be defined as those occurring beyond 2000m.
From this point of view, most of the geothermal resources of the country, having
potential for hosting power generation, would qualify to be termed as Deep
Geothermal Resources.
3.1.3 Direct use of geothermal energy means the thermal energy from
underground is used directly as heat, rather than being used to generate electricity.
Direct heat uses of geothermal energy are major contributors to substitution of
electricity. The hot springs with low reservoir temperatures, i.e., <130 °C can be
utilized for direct heat uses. The hot water of 60° - 130 °C can be used for direct
heat utilization if the difference in temperature with the surroundings is adequate to
extract the heat content. The most appropriate use of resource available at
temperature up to 130 0C may be in space cooling (cold storages) which is like
virtual power. In addition, such resources may be ideal for enhancing tourism-
related amenities.
3.1.4 Geo-exchange Well (GSX) Definition: Geothermal heat exchange bore
well is a uncased artificial excavation that uses the heat exchange capacity of the
earth for heating and cooling, in which excavation the ambient ground temperature
is 280C or less, and. It does not add any chemicals (for HVAC water treatment or for
other reason) to the water circulated in loop between source well and injection
wells. Geo-exchange system can either be open loop system or closed loop system
in horizontal/ vertical formation (GSX well). The source and injection wells shall be
designed and constructed according to IGSHPA standards for three years or till
national standards are issued.
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3.2 The scope of the Framework encompasses geothermal-based heating and
cooling system and Ground Source Heat Pumps (GSHP’s), as listed below:-
3.2.1 Geothermal Heating/Cooling based on GSHPs: Considering the large
requirements for space heating in mountainous regions of India that have extended
and severe winters, and for space cooling / air-conditioning in most other parts of
India throughout the year, the Framework will give a special emphasis on
popularizing the use of Geothermal Heating/Cooling technologies by retrofitting of
existing HVAC systems for fresh fitting for new geo-exchange based technologies.
Ground Source Heat Pumps (GSHP’s) harvest heat absorbed in the soil of Earth's
surface from solar energy and use the earth relatively constant temperature
between 16-29°C to provide heating, cooling and hot water for homes. Details on
GSHP’s are given in Section 6.2.
3.2.2 By-products: The mineral by-products from the hot springs such as silica,
borax, caesium and other alkali minerals may be harnessed by the entrepreneur;
however the extraction of such by-products would require assessment of the
impact on the primary resource and associated risks with mitigation measures, if
any. The permission for exploitation of geothermal resource shall be utilized for the
purpose for which it is given, i.e., power generation and / or direct heat utilization.
Availability of by-products will boost the bottom line of the geothermal project and
may result in lowering the Tariff. Considering the Benefits, extraction of by-
products may be allowed subject to environmental clearances.
3.2.3 Direct heat uses of geothermal energy: Direct uses can be made available
at the sites where the transportation and transmission of electricity and water may
be difficult due to remoteness of the area. Direct heat uses have a major societal
impact in the form of bathing centres, skin care centres, geothermal and botanical
parks for entertainment purpose, cold storage, spas used for tourist attraction,
green housing, aquaculture, food and paper pulp industry for utility of local
population and farming industry.
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4. History of Geothermal(GT)Studies in India
4.1 In India, preliminary assessments of geothermal resources by Geological Survey
of India (GSI) have indicated prospects of development of Geothermal Power.
Systematic efforts to explore the geothermal energy resources commenced in 1973 and
340 hot springs have identified in different parts of India with surface temperature
ranges from 35 °C to as much as 98 °C. Preliminary assessment suggests that except
for some Himalayan geothermal resources, where temperature may be in excess of 200
0C, India is in low and medium heat enthalpy zone with resource temperature of 100
to180 °C.
4.2 At present India is at nascent stage of harnessing its geothermal resources,
owing to a variety of reasons, the chief being the availability of plentiful coal at cheap
costs and relative abundance of hydropower in Himalayan region. However, with
increasing environmental problems with coal based projects and the need of the hour to
harness all available renewable energy sources, India needs to develop clean and eco-
friendly energy sources in future; one of which would be geothermal.
4.3 In India, many areas have been taken up for exploration of Geothermal Energy.
Thirty one areas have been examined in detail and shallow drilling has been completed
in sixteen areas (i.e., up to a maximum depth of 700 m in select areas and much less in
other areas). Development of geothermal resources requires deeper level exploration
and utilization of the energy for electricity generation. The deeper level exploration in
India could not be taken up due to non-availability of machinery and equipment and lack
of expertise in geothermal deep drilling.
4.4 Presently, the only direct-use of geothermal energy in the country is for bathing,
swimming and balneology and occasionally as a source of energy for cooking. The
increase in the annual geothermal use for balneology, bathing and swimming has gone
from 2,545 TJ in 2010 to 4,152 TJ in 2014; with an installed capacity of 981 MWt. It is
estimated that 5.0 MWt and 150 TJ/yr is used for cooking, which is included in the other
category. Thus, the total geothermal energy use for the country is 986 MWt.
4.5 Residential & Commercial building air conditioning consumes 30-60 % of the
total electricity consumption. The penetration of air conditioners in India is 8 % and is
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expected to grow to 30 % in ten years. Therefore India will need 83 GW of power for
cooling the buildings in next six years. Mainly cities with large energy guzzlers
infrastructure projects such as hotels, metro-stations and airports are attributed for peak
load when cooling loads builds up. Geo Exchange Heat pumps based district cooling
systems can cool community with 3000 houses without need of AC for each room.
District cooling circulates cold air in pipe for air conditioning purposes. Geo Exchange
Heat pumps based district cooling systems can save 30-60 % savings for air
conditioning load.
5. Potential Geothermal regions/sources in India
5.1 The various assessment studies and surveys undertaken so far have resulted in
the identification of 340 hot springs across India. 7 proven geothermal provinces in India
are as follows:-
Himalayan Geothermal Province
West Coast Geothermal Province
Cambay Garben Geothermal Province
Son- Narmada Tapi Geothermal Province
Godavari Geothermal province
Mahanadi geothermal province
North Indian geothermal province
Some of the most promising geothermal sites for the development of geothermal energy
are:
Puga in Jammu & Kashmir
Cambay Graben in Gujarat
Tattapani in Chhattisgarh
Chhumathang in Jammu & Kashmir
Manikaran in Himachal Pradesh
Surajkund in Jharkhand
Ratnagiri in Maharashtra
Rajgir in Bihar
Topaban in Uttarakhand
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Sohana belt in Haryana
Bakreshwar in West Bengal
Khammam in Telangana
Badrachalam in Telangana
Chintalapudi in Telangana
5.2 On the basis of enthalpy characteristics, the geothermal systems in India, can be
classified into medium enthalpy (125°C-200°C) and low enthalpy (<125°C) geothermal
systems. These are described as follows:
5.2.1 Medium enthalpy geothermal energy systems:
The medium enthalpy geothermal energy resources are associated with:
1. Younger intrusive granites as in Himalayas, viz Puga-Chumathang, Parbati, Beas
And Satluj Valley geothermal fields.
2. Major tectonic features/lineaments such as the West Coast areas of
Maharashtra; along the Son-Narmada-Tapi lineament zone at Salbardi, Tapi;
Satpura areas in Maharashtra;
3. Tattapani in Chhattisgarh and Rajgir-Monghyar in Bihar; Surajkund, Tatta and
Jarom in Jharkhand, Bakreshwar in West Bengaland Eastern Ghat tracts of
Orissa.
4. Rift and grabens of Gondwana basins of Damodar, Godavari and
MahanadiValleys.
5. Quaternary and tertiary sediments occurring in a graban in the Cambay basin of
West Coast.
5.2.2 Low enthalpy geothermal energy systems:
The low enthalpy geothermal energy systems are associated with:
1. Tertiary tectonism and neo tectonic activity.
2. Shield areas with localized abnormal heat flow, which is normally very low.
(http://mnre.gov.in/file-manager/UserFiles/geothermaldatabase.html)
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6. Geo-Exchange (GSX) Pumps/ Ground Source Heat Pumps (GSHP’s)
6.1 In spite of capacity addition in power generation, there remains a huge deficit
between demand and supply. The national average demand- supply gap during peak
hours is about 22%. So with an economy projected to grow at 6-8% per annum, rapid
urbanization and improving standards of living for millions of Indian households, the
demand is likely to grow significantly. Therefore, increase in generation capacity only,
can’t meet the demand of high growth rate. Simultaneously, reducing the demand by
proper Demand Side Management (DSM) activity by deploying Ground Source Heat
Pumps is equally important for the energy security of our country. DSM becomes more
prominent in countries like India where average T&D loss is near about 22%. Hence,
Special emphasis is given to GSHP’s in this Framework in order to mitigate the demand
side electricity requirement.
6.2 Ground Source Heat Pumps (GSHP’s) use the earth's relatively constant
temperature between 16 – 290C at a depth of 5-20 m to provide heating, cooling and hot
water for homes and commercial buildings. GSHP harvests heat absorbed at the Earth's
surface from solar energy. The temperature in the ground below 6 m is roughly equal to
the mean annual air temperature at that latitude at the surface it uses the earth as a
heat source (in the winter) or a heat sink (in the summer). GHP’s is effective in all kind
of climate zones or can be deployed anywhere in India on 24 x 7 bases. Worldwide,
Geothermal direct heat utilization and heating/cooling application is accepted as one of
the most developed, cost-effective and proven renewable energy technologies to
mitigate the demand side load in a sustainable manner. The total installed capacity,
reported through the end of 2014 for geothermal direct utilization worldwide is around
70.3 GWt and the leading countries with the largest capacity of geothermal direct
utilization are China, Sweden, USA, Turkey, Iceland, Japan, Hungary, Italy and New
Zealand.
GSHP’s can be categorized as having closed or open loops and those loops can be
installed in three ways: horizontally, vertically, or in a pond/lake, sewage system or
other water bodies. In comparison to the traditional air conditioning systems, up to 50%
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energy savings can be achieved through this innovative technology. In addition, the
technology is also 100% water efficient since it rejects heat using conduction,
convection and advection and not through evaporation as in traditional A.C system
cooling towers which lose approximately 6-8 liters of water per hour to the atmosphere
for every ton of air conditioning.
6.3 Government of India, Ministry of New and Renewable Energy (MNRE)
contemplates initiatives in deployment of Geothermal technology specifically for the
purpose of cooling, drying, space heating, greenhouse cultivation, Industrial processes,
Cold Storage, Poultry & Fish Farming, Mushroom Farming, Horticulture etc. MNRE is
also working in collaboration with BEE on increasing the efficiency by more than 50% of
conventional HVAC system by retrofitting /replacing the cooling towers (Air cooled) by
Geothermal based systems.
7. Who can avail the Programme
7.1 The scheme is open to public and private sector to carry out projects in India. In
case foreign entrepreneur with proven technologies is willing to work in consortium with
indigenous companies, they will be benefited by the scheme as 100% FDI is allowed in
Renewable Energy Sector. During the initial stage, funding of work for RD&D may be
supported where there is a demonstrable contribution to resolving specific Indian
issues. Applications will be accepted from individual organizations, or from
organizations acting in collaboration with other international organizations or with third
level colleges/research institutes, either on a contractual basis or within consortia or
joint ventures. Collaborative development programmes between manufacturers or
service companies and research institutions or other centers of learning are
encouraged.
7.2 All stake holders like HVAC Contractors & Suppliers, Food Processing Units
Manufactures, Builders & contractors, Cold storage, Green House Manufacturer,
Hotel/Restaurants Owners, Industry owners, Social/ Religious Institutions, School
Owners are encouraged to come forward for deployment of GSHP heating/ cooling
technologies in India and suitable Demo grant will be provided on case to case basis.
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8. Eligibility of the projects:
The Programme is intended to support organizations, universities or other third-level
institutions in undertaking fundamental research and industry-led projects to develop
and test geothermal energy capture devices and systems. Third-level institutions
wishing to undertake fundamental research should contact the relevant body for such
funding (such as the Ministry of Earth Sciences, Geological Survey of India, National
Geophysical Research Institute, etc).
For Geothermal Power exploration the entrepreneur may approach State Government
covering potential geothermal zone for block/Site allocation. Geothermal resource
assessment in an area requires reconnaissance survey for deciding the prospect to be
explored. The reconnaissance permit and prospecting lease may be issued by the State
Government in collaboration with MNRE within three months. Exploration activity can
be taken up in the area already under prospecting license.
9. Proposed facilitation & Methodology for Geothermal Energy
9.1 Awarding suitable area of land for developing the project and maintenance of
production wells, thereby securing the commercial viability of the project, the
entrepreneur may approach State Government for allocation of land which may be
facilitated as per rule in vogue after ascertaining potential through geo-magnetic survey,
exploration well, satellite database etc.
9.2 The involvement of foreign entities may be encouraged for exploration and
development of geothermal resources provided the "foreign collaboration" is tied up with
technology transfer as 100% FDI is allowed in Renewable Energy Sector.
9.3 Ministry of Finance, Government of India is already providing 40% depreciation
for installation of heat pumps during the first year of installation. They are categorized
as energy saving devices under waste heat recovery equipment. In order to encourage
geothermal projects in country, Ministry will propose to Finance Ministry for a revenue
ruling in terms of import, excise relaxation & tax benefits on equipment and machinery
required for setting up of geothermal heat pumps and geothermal power generation
projects.
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9.4 The level of funding will be decided on a case to case basis. A major thrust would
be given through this Framework to Innovation, Research & Development and
Deployment of the projects in the field of Geothermal Power Generation and GSHP
based heating/cooling technology. The proposed funding is given in the table below
(Guidelines) for which a separate scheme will be notified in due course. The
geothermal power project is eligible for funding up to these levels; the actual funding
level provided will depend on the detailed evaluation of the project with regard to
administrative and technical compliance, acceleration of the development of
Geothermal energy in India, ability to overcome technical and other barriers,
contribution to the development of an indigenous and Indian Collaborative GT industry,
environmental compatibility and project management capability. For geothermal power
plant to become technically viable for CFA, Geothermal power plant should run at
minimum 80% Plant load factor (PLF) for at least 3 months. For standalone GSHPs/
District heating/cooling systems to become technically viable for CFA, plant should
achieve minimum 30% savings of electricity against conventional HVAC systems.
Funding for projects which are found technically viable is done through National Clean
Energy Funds (NCEF) with Government financial incentives on case to case basis
based on Committee under MNRE. The incentive will be provided through lead
banks/Financial Institutions for offsetting loan portion at suitable interval after
establishment of geothermal reservoir potential. The bids will be evaluated through
reverse bid method in case competitive bid is not adhered to by concerned authorities.
9.5 The categories below represent the maximum level of support. All CFA subject to
prior sanction by MNRE which could be available
S.No Project Types In-principle Subsidy
a)
Demonstration Power Projects
Phase-I: 50% of Insurance availed for Deep Drilling
cost will be reimbursed in case of Drilling Failure
subject to maximum of Rs 6 Cr for doublet. After
Failure it may be converted into grant on case to
case basis subject to development of geothermal
site as direct Geothermal use (GDU) or geothermal
heating/cooling.
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Phase-II: On successfully completion of Phase-I,
30% CFA of Capital Cost (50% for PSUs/Govt.
organizations) to first five projects of size 3 to 5 MW
subject to maximum support of Rs 9 Cr/MW up to 25
Cr per project.
Commercial/ Industrial
Power Projects
a) For project size from 3 to 5 MW 30% of Capital Cost subject to Maximum support of 9 Cr/MW up to 25 Cr. Per project.
b) For project size exceeding 5 MW As per above a) up to 5 MW size and thereafter 3 Cr/MW Subject to maximum of Rs 100 Cr per project. *** For Deep Geothermal Resources, 10% more CFA will be available apart from as stated above **** For Ultra Deep Geothermal Resources, 25% more CFA will be available apart from as stated above
b) District
Heating/Cooling
Systems
30% of Capital Cost subject to maximum of 1.5
Cr/MWth equivalent or 50 Lakhs per Million BTUs
subject to maximum of 5 Cr per project whichever is
minimum
c)
Stand Alone Ground
Source Heat
Pump(GSHP’s)/ Geo
Exchange Heating/
Cooling
(Using Close Loop or
Open loop systems)**
Subsidy of 30% of project cost for closed loop type systems in the form of incentives with maximum support of Rs 50,000 /TR for first 100 MWt capacity (Individual plant of more than 100 TR capacities), Rs 30,000/TR for next 200 MWt and Rs 10,000/TR from thereafter. Subsidy of 25% of project cost for open loop type systems in the form of incentives with maximum support to of Rs 15,000 /TR for first 300 MWt capacity (Individual plant of more than 100 TR capacities), Rs 10,000/TR for next 200 MWt and Rs 5,000/TR from thereafter.
** Separate Scheme for standalone GSHP based Heating/cooling systems will be
notified in due course.
***** 1 MW th = 284.4 ton (refrigeration)
****** 1 MW th = 3.4 Million BTU/h
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9.6 Each category is defined as follows:
a. Demonstration Power Projects: In this category the Research, Design,
Development and deployment of the New Technology for the deployment of the
Geothermal Energy including its Hybridization with other Renewable Energy (RE)
Technology will be considered to initiate geothermal based power generation. The
scheme stresses to carry out survey/studies for resource assessment/development
of geothermal fields of the country. Under the above programmes of the Ministry,
Research & Development (R&D), Technology Development, Demonstration Projects
and projects on other related activities are submitted to the Ministry for the financial
support. Such projects are scrutinized in the Ministry for support and approval of the
competent authority.
b. Commercial/Industrial Power Projects: In this category the projects comprising to
only power production and distribution to the state utilities with revenue generation
will be considered.
c. District Heating/ cooling systems: Project comprising for thermal applications for
instance the geothermal fluid can be used for space heating, greenhouse
cultivation, cooking, spa, bathing, aquaculture, refrigeration, paper pulp, food
processing, etc. In all such projects, MNRE would facilitate the NGO’s, individuals,
entrepreneurs, Central or State PSU’s and other private players.
d. Standalone Ground Source Heat Pump (GSHP)/ Geo exchange Heating/
cooling systems (Open loop/ closed loop type): The basic principle on which the
GSHP works is "refrigeration cycle". The refrigerant carries the heat from one
"space" to another. The heat pump's process can be reversed. The earth is the main
source and sinks of heat and utilizes constant temperature at 10-300 m below the
earth surface. In winter it provides heat and summer it absorbs the heat. The heat
pumps can be adapted to any kind of building at any place as India has a high
potential for direct heat use. In an open loop system groundwater/lake water is used
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as the heat carrier and it is brought directly to the heat pump evaporator i.e. there is
no barrier between the heat carrier and soil, rock etc Sufficient permeability is
required for this kind of system. Open loop systems consist primarily of
extraction/reinjection wells and surface water systems. The water is drawn from a
source i.e. the primary aquifer, passed by the heat exchanger and then
discharged/re-injected into a separate aquifer, well or surface water system
(river/lake).
10 Eligible Cost
10.1Costs Allowable
Costs directly associated with delivery of a project may be eligible for support. In the
case of successful applicants, only eligible expenditure incurred from the date of
approval of the application by the Authority will be considered for funding. Expenditure
incurred before this date is not eligible. Therefore, applicants must not begin any work
for which funding is sought. The aid intensity will be calculated on the basis of the costs
of the research project to the extent that they can be considered as eligible. All eligible
costs must be allocated to a Project cost. The following costs shall be eligible:
Costs of Machinery and equipment used for power production in the research&
Development project are considered as eligible.
Cost involved in digging the geothermal well at potential sites.
Cost of contractual research, technical knowledge and patents bought or
licensed from outside sources at market prices, where the transaction has been
carried out at arm’s length and there is no element of collusion involved, as well
as costs of consultancy and equivalent services used exclusively for the research
activity.
Other operating expenses, including costs of materials, supplies and similar
products incurred directly as a result of the research activity.
In case of a subsequent commercial use of demonstration or pilot projects, the feed-in
tariff (FIT) will be devised as per the PPA with the state utility.
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11 Guidelines for states
11.1 The role and active participation of the States is crucial in the planning and
implementation of Geothermal programmes. The State Governments would be asked to
empower its existing agency i.e. SNAs to act as single nodal agency for development
and promotion of Geothermal in their States including securing all necessary
permissions required from various statutory authorities. Proposals for prospecting and
exploration of geothermal energy resources would be submitted to the MNRE through
State Nodal Agencies (SNA).The SNAs should forward the proposals to MNRE within a
period of 3 month from the date of submission by the applicant / Entrepreneur including
decision by SERC on Project specific Tariff for Geothermal projects. Decision on the
proposals submitted to MNRE through SNAs should be conveyed to the respective
SNAs within a period of 1 month from the date of receipt at MNRE. The SNA would
convey the decision to the applicant / Agency within a period of one month from the
receipt of the application
11.2 State governments may allocate the possible geothermal sites/ blocks for
exploration and further development for power generation. Also entrepreneur can
approach MNRE through concerned SNA for any financial assistance or Viability gap
funding (VGF) after securing the Power Purchase Agreement (PPA) with relevant state
Agency/ Discoms.
11.3 The State Governments may facilitate land acquisition required for plant once
geothermal resource is proved at prevailing market prices determined by state Revenue
departments or may lease the land to entrepreneur at a rate of Rs 20000/- per acre per
year for Agricultural land/ Industrial land and Rs 5000/- per acre per year for Non
agricultural land or forest land subject to prior permission by forest department if
applicable.
11.4 The Entrepreneur may approach a public sector or private sector company
operating in Geothermal provinces which is already in operations like mining, oil and
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gas exploration, etc for agreement as most of the necessary statutory permissions,
environmental clearances, etc required are in place already.
11.5 The state government may also seek royalty on geothermal resource allotted to
entrepreneur on the basis of end use of geothermal resource. State government may
earn the royalty at the rate of Rs Ten lakhs per MW per year for first ten years and Rs
Twenty lakhs per MW per year for next 20 years for commercial power production
plants subject to maximum of 2% of Total sales revenue of electricity production in lieu
of facilitation of land, water resources and power evacuation to nearest point. For
geothermal heat direct use application state government can earn Rs Five lakhs per
MWth per year for industrial process heat, Rs Two lakhs fifty thousand for Recreational
use/Tourism sector and Rs one lakh for agricultural/horticulture/Aquaculture use. Also
there will be no Royalty charged for first 5 Demonstration geothermal power plants of
Average size of 3 -5 MW. Each state would be eligible for one demonstration project
only. Capacity of geothermal power plant would be arrived at by dividing Annual
average production of electricity in KWh for any three consecutive years with 6 million
KWh production of electricity per MW plant. Capacity of geothermal direct use plant
would be arrived at by dividing Annual average production of thermal energy in Btu for
any three consecutive years with 3.4 million Btu production of thermal energy per MW
plant.
* 1 MW el geothermal plant produces 6 million KWh annually.
11.6 State Government may charge Exploration development fees at Rs 500000/- per
year for one block allocated of approximately size of 80-125 sq km for establishment of
geothermal resource located in the proved 7 Geothermal Provinces in India for a period
of 5 years which can be extendable to further 5 years and Rs 250000/- year for one
block allocated of approximately size of 80-125 sq km for unexplored geothermal sites
in Non Geothermal region after the entrepreneur satisfies the terms and conditions as
stated above for a period of 5 years which can be extendable to further 5 years.
11.7 Once the entrepreneur of a Geothermal Project for geothermal power generation
is identified by SNA and MNRE, the SNA would facilitate a Power Purchase Agreement
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from the relevant State Agency at a price approved by SERC. In the absence of any
SERC tariffs/ Project specific tariffs, PPA pricing may be taken as worldwide average
tariff for Rs 10 per KWh for next decade with Viability Gap funding from MNRE may be
facilitated beyond that.
11.8 The State would help the entrepreneur in presenting its case to the State Energy
Regulatory Commission.
11.9 A committee of at least three members comprising representatives of MNRE,
State Government and Industry/Academia shall evaluate the report and
recommendations of the prospecting / exploration agency desirous of CFA for further
exploration/exploitation activity in the area.
11.10 SNA of respective state will help entrepreneur to get all mandatory and statutory
clearances required for setting up geothermal project.
11.11 The state government may also seek royalty on geothermal blocks allotted to
entrepreneur on the basis of end use as district Heating/cooling systems. State
government may earn the royalty at the rate of Rs 5 lakhs per sq km per year of geo
thermal block allocated for Ground source Heat pumps (GSHPs) closed loop type
and the royalty at the rate of Rs 2.5 Lakhs per sq km per year of geothermal block
allocated for Ground source Heat pumps (GSHPs) open loop type in Municipal areas
with population more than 10 Lakhs. State government may earn the royalty at the
rate of Rs 2 lakhs per sq km per year of geo thermal block allocated for Ground
source Heat pumps (GSHPs) closed loop type and the royalty at the rate of Rs 1
Lakhs per sq km per year of geothermal block allocated for Ground source Heat
pumps (GSHPs) open loop type in Municipal areas with population less than 10
Lakhs. Also there will be no Royalty charged for first 500 MW Demonstration
geothermal heat pumps projects. Each state would be eligible for one demonstration
project only.
11.12 The necessary statutory permissions required for digging geothermal production
wells for GSHP applications has been delegated to state Government relevant
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authorities i.e. District Collector/ District magistrate/ Municipal Commissioners, etc by
Central Ground Water Board in most of the areas of India except low water table
areas notified by Central Ground Water Board, Ministry of water Resources,
Government of India and also available on its website. Entrepreneur will have to seek
permission from CGWB for this area and may approach MNRE or concerned SNA for
help. Contact information about concerned SNAs is available on MNRE website via
this link: http://mnre.gov.in/mission-and-vision-2/contact-us/state-nodel-agencies/.
12 Awareness and Capacity Building
12.1 Support will be provided for creation of awareness about the role and importance
of Geothermal Energy in the energy sector, as well as for wide dissemination of
information about its potential and opportunities in mitigating the demand side electricity
requirement by deploying Ground Source Heat Pumps.
12.2 The required expertise in these areas needs to be acquired to carry out a
complete characterization of the geothermal energy resources in the country. This can
be achieved through collaboration channels existing between MNRE and geo-thermally
advanced countries such as Iceland, Philippines, New Zealand and Australia.
12.3 Significant thrust would be provided to capacity building and training and
development of human resources. Universities, Polytechnics and Industrial Training
Institutes will be encouraged to introduce suitable curricula to cater to the demand for
trained manpower in geothermal sector. Efforts will also be directed at enhancing and
expanding consultancy capabilities to meet the diverse requirements of this sector.
12.4 Programmes for public awareness in utility of geothermal energy for societal
benefits may be arranged by organizing interactive sessions and lectures, and by
publishing popular articles.
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13 Application, Evaluation and Approval Procedure
13.1 Application Form
Applicants must demonstrate strong technical and theoretical foundation for their
technology and be able to describe satisfactorily the theoretical performance of a
proposed device. The theoretical model must provide empirical data for the
performance and cost of the proposed device. Application form will be available on the
MNRE website and project entrepreneur need to apply as per the format of the
application form. Applicants can also submit the application form and associated
documents electronically by email or by hardcopy. Larger scale projects will also be
required to demonstrate a viable Business Development Plan.
13.2 Evaluation Criteria
Once the proposal is received by MNRE through hard copy or in electronic version of
the Application Form containing electronic signatures, after that MNRE will scrutinize
the proposals as per the evaluation criteria. Proposals will be evaluated to determine:
Administrative compliance with programme requirements.
Technical merit.
Compliance with the programme objectives.
Ability to facilitate and accelerate the development and deployment in India of
competitive Geo-thermal energy products, processes and systems.
Ability to enable technical and other barriers to the development and introduction
of Geo-thermal Energy to be overcome.
Contribution to the development of an indigenous Geo-thermal industry.
Environmental compatibility of the technology/project.
13.3 Approval Procedure
Sanctioned Central Financial Assistance amount shall be released in a single
installment on successful commissioning of the project and performance testing of the
project which would inter-alia imply operation of the project for at least three months at
minimum 80% of rated capacity. Five members committee will be formed to approve
CFA headed by Secretary, MNRE as its chairman and other members one from MNRE,
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one from concerned SNA, one from Academia and two from Industry A committee of at
least three members comprising representatives of MNRE, State Government and
Industry/Academia will be deputed for on-spot assessment of project. The entire capital
subsidy amount would be released to the beneficiary’s loan account in the lending
financial institution/banks for the purpose of offsetting the loan amount only after
successful commissioning of project as per DPR norms and receipt of copies of
statutory clearances and requisite project related information / documents. In case the
project is set up by the entrepreneur through its own resources, the Central Financial
Assistance would be released directly to them only after the successful completion of
project.
MNRE will perform the following action before the approval of the project grant:
Review the Project Completion Report
Review all financial documentation
Carry out a Project Site Inspection. These inspections may take place at any
stage of the project including: during the project; the project review or post
project completion.
**********
Director (Geothermal) Ministry of New and Renewable Energy Block -14, CGO
Complex Lodhi Road, New Delhi -110 003, INDIA
Email id: - [email protected]
Email id:- [email protected]
Contact No. 01124365619
Fax No. 01124361298
For more information, visit our website: www.mnre.gov.in