The Energy Transition in India: Creating Decent and Inclusive Green Jobs for All?

Around the globe, the shift from fossil fuels to renewable energy sources is accelerating. The economics behind this trend are simple to understand: between 2010 and 2017 solar, wind and renewable energy prices have fallen precipitously. In fact, they have fallen so fast that many of these technologies are now on a par with, if not more competitive than, fossil fuels. Although the benefits of cheaper and cleaner energy are undeniable, it is important to consider the many social and political challenges that need to be addressed if green transitions are to be effective and equitable. This think piece looks at the case of India to discuss how green jobs can become more decent and how to manage change in states that have depended on fossil fuels for their growth.

Joachim Roth's research interests cover green growth, social policy, and how to integrate climate change policy with local livelihoods. At the time of writing he was a research intern with UNRISD. He has worked for LSE Enterprise and Cleary Gottlieb Steen and Hamilton, and interned in Peru with Nexos Voluntarios, working on a community-based development scheme. He holds a Bachelor's degree from McGill University in Political Science and Economics, and a Master's degree in development studies from the London School of Economics and Political Science.

India's solar mission

India has recently embarked on an ambitious “National Solar Mission” aiming to increase the share of its solar energy from 19GW in 2017 to 100GW by 2022. Considering its technological constraints, it is currently faring well in its solar capacity generation, and has become the sixth largest solar producing country in the world. Achieving 100GW by 2022 would place India among the top three leaders in the industry after China and the US. The benefits of this target are considerable with significant potential to create green jobs in areas like construction, project commissioning and design, business development, and operations and maintenance. Many of these jobs would require semi-skilled and low-skilled labour, which constitute the bulk of the labour force in India. The current number of people working either directly and indirectly in the solar industry stands at 178,000 and is expected to increase up to 1.1 million as the industry expands to meet the targets set by the Modi government.

So why the scepticism? First, we should ask ourselves whether the ambitious 100GW figure quoted earlier is even feasible. Some analysts doubt this target will be achieved due to the in-built dependency of the Indian solar industry’s business model, relying on modules and silicon feedstock imported from China to build its panels. There are other reasons to doubt this target will be met, such as the difficulty in acquiring land, or the fact that more investment is needed in grid infrastructure and the transmission and distribution of electricity.

Second, even if the 100GW target is achievable, this does not tell us which actors stand to benefit or lose out in the process. We should pay closer attention to how this target will translate into decent green jobs and what it implies for current fossil fuel workers. This is particularly true in India where coal represents a significant share of economic activity and employment.

Creating decent green jobs

Perhaps one of the most troubling aspects of the Solar Mission is its lack of social inclusiveness. The Solar Mission has prioritized on-grid projects compared to off-grid ones, with as little as 1% of financing geared toward decentralized renewable energy solutions. However, off-grid solutions are essential considering the typical challenges the grid faces in remote rural regions such as low and fragmented demand for power and electricity distribution companies' debts.

From a decent work perspective, the World Resource Institute has showed that in India off-grid jobs are on average more likely to have long term contracts with better health care and social security provisions than on-grid ones. These jobs have also been shown to improve community cohesiveness, psychological empowerment and in some instances, have reversed urban pull forces.

Yet there are hurdles that prevent off-grid jobs from really taking off. One of the most significant is the lack of education-industry linkages to enable solar jobs to benefit those that need it the most. Training programmes are not necessarily well-tailored to the needs of the industry, catering more towards high-skilled jobs as engineers or scientists, for example. This is likely to increase the supply-demand mismatch as most of the solar jobs are in construction, installation and maintenance. Solutions could be provided via education, such as vocational training that prepares students for the jobs the industry needs, or through technology: the government, through the Ministry of New and Renewable Energy (MNRE), has for example launched a mobile phone application called Suryamitra which is intended to increase the public’s awareness about green jobs. Similarly, there are many hurdles that prevent the rural poor population and women from benefiting from these training programmes. These groups are at a disadvantage as they often do not have the necessary educational requirements. Creating traineeships which emphasize learning by doing rather than formal educational attainments could enable them to benefit more from green jobs.

Putting in place an effective coal phase-out programme

At the sub-national level there is also a discrepancy in terms of the states that will benefit from the energy transition. Most of the states with high solar potential and capacities are situated in the western regions, whereas the coal belt is largely situated in the eastern states which have fewer financial resources and fewer sites with high solar potential. The coal industry currently contributes about 60% of the energy mix while employing around 500,000 people directly and up to 20 million indirectly. Activities such as coal production, transport and disposal constitute up to 50% of the earnings of states such as Jharkhand and Odisha. While a phase-out is unlikely to occur in the immediate future due to the stranded financial assets it would generate, it is certain that the energy mix will have considerably changed by 2030. Yet most of the green jobs generated will not benefit the states that need them the most. A more proactive phase-out strategy needs to be developed.

In addition, the 1.1 million solar jobs that could be created would only represent a fraction of the coal jobs that might be lost in the process. As identified by the Indian Economic Survey 2016-2017, welfare transfers are likely to increase from the richer western states to the poorer eastern ones in the future. However, historically we know that transitions that have exclusively focused on income compensation have not fared particularly well. This is especially true in India where coal is deeply enmeshed in the culture and local politics of redistribution. A longer-term strategy and a more holistic approach are needed. This means moving away from energy deterministic assumptions, which assume that the shift to renewables is a stand-alone policy goal, and doing more to invest in multidimensional factors such as education and human capital.

In conclusion, India’s energy transition can be characterized as a socio-technical one which prioritizes short-term results and rapid renewable energy expansion, without questioning its social implications, such as how this will affect the coal sector, or who is able to access the new green jobs. Building solar parks is certainly important but it will not increase the access to energy of people living in remote rural regions nor will it improve their livelihoods without the proper education-industry linkages in place or more emphasis being put on off-grid solutions. India is at a crucial stage of its energy transition, and to avoid not only a carbon but a social lock-in taking place, the state needs to re-embed the solar industry in the fabric of society, making it accessible to all and not simply an urbanized elite.

Photo: DFID, via Flickr (CC BY-NC-ND 2.0)