4 minute read 28 Apr 2022
Just transition for workers

How re-skilling of coal mine workers will play a crucial role in India’s transition to renewable energy

By Somesh Kumar

EY India Power & Utilities Leader

Experienced energy leader with deep regulatory knowledge.

4 minute read 28 Apr 2022

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  • Skill action plan to fuel transition from coal to renewable energy in India

Strong skill action plan needed for workers facing loss of livelihood due to transition. 

In brief

  • Coal mines create over 7.25 lakh direct mining jobs and many more indirect jobs. Thousands of workers are at risk of disruption in livelihood especially in West Bengal, Madhya Pradesh, Chhattisgarh, Jharkhand, and Maharashtra
  • ‘Just Transition’ concept will address the economic vulnerabilities of the coal mine workers due to the potential loss of livelihood
  • Skill action plans to enable states to take action for industry-relevant skilling and livelihood options for the transitioning miners

India is consistently working at a global level to reduce emission intensity to attain the net-zero target for 2070. While India’s power sector is one of the most diversified ones in the world, thermal power generation by coal accounts for approximately 62% of the total generation capacity. 

As the transition from coal to renewable sources of energy takes place, the demand for energy will increase leading to the dependence on coal also expected to rise further in the coming years. Therefore, a dual challenge lies ahead of India — reducing its greenhouse gas emissions and managing the workforce associated with the thermal sector. Almost 50% of the mines in India are hugely unprofitable and may soon face shutdown thereby impacting the livelihood of workers in those mines. 

According to the EY, SED Fund and FICCI report titled, “Skill action plan to fuel transition from coal to renewable energy in India”, for this transition to happen smoothly from conventional to clean fuel-based energy generation, it will be imperative to protect the interests of coal mine workers through a holistic approach. There is a need to formulate a Skill Action Plan to address their economic vulnerabilities and have a reskilling framework designed to ensure their rehabilitation.

This report focuses on the skilling ecosystem for the group population of this mono-industry of coal mining, dependent on coal for livelihood in one way or another. It is imperative that these workers are provided with the necessary skill set to transition out of the coal sector and obtain gainful employment elsewhere.
Somesh Kumar
EY India Power & Utilities Leader

Impact of the shift on the workforce

Coal mines create over 7.25 lakh direct jobs and many more indirect jobs. With the retirement of old coal plants and shutting down of mines, thousands of coal mine workers are at risk of disruption in livelihood in the five states – West Bengal, Madhya Pradesh, Chhattisgarh, Jharkhand, and Maharashtra. Most of them are blue-collared workers who need to be upskilled with the newer skills of the hour. Apart from the direct workers, the entire economy of mining districts revolves around coal-related activities, and communities have relied on it for generations. 

The concept of ‘Just Transition’

‘Just Transition’ addresses the economic vulnerabilities due to the potential loss of livelihood of coal mine workers. It is important to lay impetus on facilitating economic diversification and livelihood promotion for the reintegration of the miners in the alternate industries. Various reskilling programs will enable the affected miners to gain new skills and resources to diversify themselves out of the coal mining industry. Entrepreneurship development and promoting MSMEs will be the key factors in reviving and diversifying the economy of coal-dependent industry towns.

State skill action plans

As per the report, the skill action plans will act as a blueprint/framework of actions to help design industry-relevant skilling and livelihood promotion interventions for the transitioning miners. These plans, outlined by the report, will empower the states to lead with a strategy for addressing the transition needs of the workers. The components of the Skill Action Plan include the following:

  • Identification of geographical clusters, estimating potential job losses
  • Assessment of the target population – miners 
  • Identification of key industry drivers and imperatives 
  • Creating synergies across ongoing skill enhancement and livelihood support programs
  • Collaboration and institutional strengthening for funding and program delivery support 
  • Capacity building of functionaries to actualize the convergent program delivery 
  • Monitoring and impact evaluation to assess the benefits of the programs to the miners
  • Knowledge management – a repository of ready reckoners, global and national best practices, etc.

(EY India GPS Partner Amit Vatsyayan also contributed to this article.)

Skills and entrepreneurship development will play a key role in the ‘just transition’ of coal mine workers as the transition materializes. It will enable economic diversification of coal-dependent areas and also attract investments to these regions.
Amit Vatsyayan

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Summary

In light of the transition from coal to renewable energy, the interests of coal mine workers need to be protected and their skills to be enhanced, to address their economic vulnerabilities and support their future sustenance. It is important to identify and include these institutions and workforce as an integral part of this energy transition and support their evolution into an economy driven by renewable energy. Only then, will this energy transition be a just transition, and affirm India’s pole position as the climate and energy leader globally. 

About this article

By Somesh Kumar

EY India Power & Utilities Leader

Experienced energy leader with deep regulatory knowledge.