Geothermal Energy in India

Except for a few sporadic and half-hearted attempts Government, officially, has done practically nothing to exploit this vast reserve of FREE energy. And unlike in the sectors of wind and solar energy, no benefits or incentives have been formulated or announced to attract investment in geothermal energy and to induce private parties to  explore and exploit  this sector.

Given this state of affairs and the indifferent attitude of most  State (local) governments to pursue geothermal sources of power,  and  the absence of any stand on geothermal power on the part of the Central Government, it is not surprising that on the world map India does not figure anywhere as far as geothermal power is concerned.

Mr Avinash Brahmbhatt, Managing Director of Avin Energy Systems Ltd, seems to be the only person who has made  efforts to exploit geothermal energy to generate power in the State of Gujarat in Western India.  He claims to have made a study of the geothermal  resources of the region, identified most likely spots and prepared a detailed project report. However, for some reason or the other Government (State and Central) do not seem excited or even interested in helping (directly or indirectly) to get the project moving. In fact  only private investors have, so far,  shown concrete  interest in promoting this geothermal power project. If in the near or distant future, geothermal power generating projects do come up all over India, it will not be due to any encouragement  by Government.

The latest news is that Government of Gujarat has framed a new policy and pased a government resolution (No REP-102000-502-B) aimed at formulating an incentive policy for  solar photo voltaic, geothermal, waste utilization, biomass, etc. Under this Policy 

project promoters in any of these categories wishing to set up power generating projects to sell power to Gujarat Electricity Board shall have to enter into a power purchase agreement at Rs. 2.25 per unit (1994-95 as base with 5% escalation in rate every year for a period of 10 years from date of commencement of generation of power)
Investor shall lay down power evacuating lines to the grid lines of GEB at his own cost
Metering at site shall be done by Gujarat Energy Development Agency and GEB jointly and GEB shall make payment within 30 days of receipt of invoice. An "Electricity Credit Note"  shall be issued by GEB to the power supplier which can be transferred to any HT consumer of GEB who can adjust his electricity bills against the "credit note". 
Wheeling charges of 4% of the generated units shall be deducted. 
Third party sale of power shall be permitted subject to payment of 4% wheeling charges. 
Banking for a period of 12 months shall be permitted by GEB
GEDA will function as nodal agency for the purpose of implementation of this scheme. 
Investors will submit applications to GEDA in prescribed form and for grid interface to GEB along with a payment of Rs. 200000 per MW (to cover incidental expenses)
Investor shall prepare and submit a detailed project report within 6 months from date of "in principle" approval to be got approved from E&PCD department of Government of Gujarat..
Other approvals/NOCshall be required for the project and have to be arranged/obtained by the investor.
Once these procedures are completed investor shall enter into PPA/wheeling agreement/third party sale, etc. in consultation with EPD in Government of Gujarat. 
If investor does not take "effective steps" to implement project within 12 months from date of government approval of the project, government shall terminate approval without any further notice. "Effective steps" is interpreted as incurring at least 25% of project cost within 12 months from date of government order allocating the project. 


Let us see how progressive this policy proves to be. 

As the situation stands, in rural areas of Gujarat power supply by GEB is drastically curtailed and even industries have to observe 2 days' staggering. 

Whether prospective investors will be willing to shell out Rs. 2 lacs per MW of power intended to be produced remains to be seen. 


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