Press release

14 Apr 2022 New Delhi, IN

Strong skill action plan needed to transition from coal to renewable energy: EY, SED Fund and FICCI report

New Delhi, 14 April 2022: In line with the commitment to the environment, India has been consistently working at a global level to reduce emission intensity to attain the net-zero target for 2070.

  • 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
New Delhi, 14 April 2022: In line with the commitment to the environment, India has been 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. For the 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, formulate a Skill Action Plan to address their economic vulnerabilities, and have a reskilling framework designed to ensure their rehabilitation, according to the latest EY, SED Fund and FICCI report titled, Skill action plan to fuel transition from coal to renewable energy in India.

Speaking at the launch of the report, Somesh Kumar, Partner and Leader, Power & Utilities, EY India, said, “In the light of India’s commitments to the environment, the country is now gearing up for the transition from coal-based energy mix to renewable energy-based mix. While the ‘just transition’ theme in the Indian context is an evolving one, it is of utmost importance to plan this evolution in a strategic manner to have a smooth transition, especially for the workforce involved across the value chains of these fossil fuels. 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 skillset to transition out of the coal sector and obtain gainful employment elsewhere.”

Amit Vatsyayan, Partner and Leader (Social & Skills sector) Government and Public Sector, EY India, said, “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. The report focuses on the development of a replicable ‘just transition’ framework which can be used by districts or states to ensure that livelihood disruption of the impacted coal mine workers is minimized, and ample opportunities are provided to them. Only when the interests of the poorest and most economically vulnerable are protected, the transition may be termed as Just Transition.”

Emphasising the need for a ‘just transition’, Vipul Tuli, Chairman FICCI Power Committee & CEO-South Asia, Sembcorp Industries, said, "The shift away from coal will have far reaching implications for the country. The action plan and cost of reskilling, redeploying and rehabilitating workers from the coal sector assumes importance at a national and multilateral level as part of India’s just energy transition."

Key highlights of the report

As the shift from thermal to the renewable source 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.

  • 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 the 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

    The report outlines the skill action plans which will act as a blueprint/framework of actions to help design industry-relevant skilling and livelihood promotion interventions for the transitioning miners. These plans 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.

- Ends -

Notes to Editors
About EY

EY exists to build a better working world, helping create long-term value for clients, people and society and build trust in the capital markets.

Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform and operate.

Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com.

This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.