Uttarakhand Cabinet Clears Geothermal Energy Policy 2025 to Strengthen Renewable Energy Portfolio

On 9 July 2025, the Uttarakhand state cabinet approved the Geothermal Energy Policy 2025, marking the first structured framework for the exploration and development of geothermal resources in the state. This policy seeks to harness the Himalayan hot springs for a wide range of uses including electricity generation, heating and cooling, water purification, and community applications while promising to enhance energy security, cut emissions, and support long-term sustainability. Implementation will be led by the Energy Department in collaboration with UREDA and UJVNL.

Policy Architecture and Strategic Framing

The policy is designed with three broad levers which are resource mapping and research, investor facilitation, and institutional coordination. Scientific and technical research will be promoted to pinpoint viable sites, while project allocation will be open to both public and private entities through competitive bidding or other transparent processes. Project tenures can stretch up to 30 years, providing operational stability and investor confidence.

A notable element is the financial support provision which offers up to 50 per cent of costs capped at ₹3 crore for preparing detailed project reports or feasibility assessments for initial projects where no central funding is available. This is complemented by clear land allocation guidelines including lease or patta approvals for forest or restricted lands under applicable rules which is a significant enabler in the Himalayan context where many geothermal prospects lie within ecologically sensitive zones.

Geology and National Significance

Uttarakhand’s geothermal promise is anchored in its location along the Main Central Thrust where the Indian and Eurasian plates meet. This tectonic convergence has created multiple high-temperature hot springs such as Gaurikund, Badrinath, Tapovan, and Yamunotri, each representing a potential pilot site (Ground Report).

At the national level, the Geological Survey of India has identified 381 thermally anomalous sites with a combined potential of about 10,600 MW which is enough to power more than 10 million households. Uttarakhand alone accounts for around 40 of these sites, making it a natural choice for India’s first concerted geothermal push.

Policy Feature	Details	Strategic Implication
Project Duration	Up to 30 years	Long-term clarity attracts strategic investors
Financial Support	50% cost share ₹3 crore cap for early projects	Mitigates feasibility stage risk
Implementation Agencies	Energy Dept UREDA UJVNL	Improves inter-agency coordination
Land Access	Permissions for private and forest land under standard rules	Unlocks otherwise inaccessible geothermal potential
Targeted Applications	Power heating cooling water purification community use	Expands use cases beyond electricity

Strategic Opportunities

From a policy lens, the biggest advantage of geothermal lies in its ability to provide stable baseload renewable energy which is output that is continuous and not dependent on weather patterns. This makes it an ideal complement to solar and wind in balancing grid fluctuations, especially in Uttarakhand’s mountainous terrain where storage and transmission are challenging.

The policy also offers socio-economic dividends. By leveraging indigenous resources, Uttarakhand can reduce its dependence on hydropower which is vulnerable to climate-induced water flow changes while creating local jobs and improving rural energy access. This aligns closely with India’s broader renewable energy trajectory where diversification is essential to meeting the 500 GW target by 2030.

Implementation Risks and Oversight

The Himalayan ecology is fragile and geothermal development carries environmental risks such as induced seismicity, groundwater contamination, and land subsidence. Site selection must be informed by rigorous environmental impact assessments and community consultations.

Infrastructure readiness is another concern. Many high-potential sites are remote with lack of grid connectivity and transmission infrastructure that needs attention. Institutional capacity within UREDA and UJVNL will also need strengthening through technical expertise, environmental monitoring, and investor facilitation processes.

Regulatory oversight will be a critical determinant of success. The policy provides the enabling framework but execution will hinge on clear environmental safeguards and mechanisms for inter-agency accountability.

Roadmap for Strategic Engagement

For private sector players, this policy presents an opportunity to shape the state’s geothermal roadmap through targeted interventions. Priority actions could include:

• Launching pilot projects in high-potential zones like Chamoli or Gaurikund to validate technical and environmental feasibility
  
• Designing blended financing models that combine state support with concessional debt and private equity to reduce investor risk
  
• Building partnerships with global geothermal leaders leveraging India’s strategic energy ties with countries such as Iceland and Saudi Arabia
  
• Aligning geothermal development with broader rural electrification and energy efficiency initiatives in Himalayan districts
  
• Providing institutional support to state agencies for technical training, environmental compliance, and transparent stakeholder engagement

Closing Reflections

The Uttarakhand Geothermal Energy Policy 2025 is more than a resource development plan. It is a step in the right direction, focusing on diversifying its renewable mix beyond the familiar solar, wind, and hydro triad. Its success will depend on how effectively the state translates policy ambition into on-ground execution, with clear environmental safeguards, robust technical planning, and stronger institutional capacity developing in parallel.

For the renewable energy ecosystem this marks a strategic inflection point. The policy gives ecosystem players an opening to play a formative role in shaping not just a state’s policy implementation but potentially India’s first scalable geothermal pathway.