In doing so, the power producer hopes to benefit from a soon to be enacted geothermal energy policy which, like the National Solar Mission is achieving for solar power, will aim to spur investments in geothermal plants. Ramesh Narayan Sawant, a director at the Ministry of New and Renewable Energy’s geothermal department told Bloomberg this week that his ministry was consulting with state officials to draft a national policy that will include how geothermal development blocks may be awarded moving forward. “We must consult with each of the states and hopefully that is done by the end of this month so the policy framework can be drafted by the end of March,” Sawant said in the telephone interview with Bloomberg.
Tata is looking to be the first to build a geothermal plant in India, which will use Enhanced Geothermal Systems (EGS) technology, to extract heat from granites located at a depth of a more than 4,000 metres by circulating water through them in an engineered artificial reservoir. The heated water returns to the surface under pressure and is converted into electricity via a heat exchanger and conventional geothermal power plant.
As geothermal energy production is constant, tapping into this resource should help the Asian giant to wean itself off its dependence on imported crude oil and coal, which is used to generate more than half of its power.
Mr. Prasad Menon, Managing Director, Tata Power said, "We are happy about this strategic partnership with Government of Gujarat. This partnership not only strengthens our renewable portfolio but also creates opportunities to expand our presence in the growing renewable energy market in India. We look forward to the synergistic opportunities that the alliance presents us".
There are still issues to be ironed out if India is to successfully draft a geothermal energy policy, primarily the need for a framework agreement with Indian states that ensures they do not contest the right to allocate geothermal fields. Some states “are trying to stake a claim to the natural resource in their state,” Sawant told Bloomberg from New Delhi. “We need to work with those states to make the most of India’s geothermal resources.” Other companies that will be in the race to do just this include: Indian energy company The LNJ Bhilwara Group, which has signed an agreement with the investment bank, Glitnir, to develop and build geothermal energy power stations in India and Nepal; and Thermax Ltd, which also aspires to be the first to generate India’s first megawatt of electricity using geothermal energy.
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