Tata Power, an integrated power company, has signed a memorandum of understanding with the government of Gujarat, to explore the possibility of setting up a 5MW geothermal power plant in the first development phase, at a suitable location in the Indian state of Gujarat.

The company has also signed a similar agreement for developing a 5MW solar power plant in Gujarat.

Geothermal energy is the natural heat found within the earth, where temperature increases with depth, typically by 10-50 degree Celsius/km. In Enhanced Geothermal Systems (EGS) technology, heat is extracted from granites located at a depth of a more than 4000 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.

Prasad Menon, managing director of Tata Power, said: “We are happy about this partnership with the government of Gujarat. This partnership creates opportunities to expand the company’s presence in the renewable energy market in India.”

Earlier in April 2008, Tata Power announced the completion of signing of financial agreements for 4000 MW Ultra Mega Power Project (UMPP), coming up at Mundra, Gujarat under the Special Purpose Vehicle (SPV) Coastal Gujarat Power Limited (CGPL) The cost of the project is estimated at INR 17000 crores (USD 4.2 billion) with the first of the five units to be commissioned in September 2011.

Tata Power is an Indian integrated private power and energy company with an installed generation capacity of over 2300 MW and a presence in the segments of the power sector viz Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading.