From Coal to Solar or Wind

The Break Through | Dec, 20, 2022

Employment and the clean energy transition in India’s coal-producing states.

According to the Intergovernmental Panel on Climate Change (IPCC), the world will have to reduce its coal use by 73% to 97% by 2050 to be able to limit global warming to 1.5°C.

Taken at face value, reducing coal use immediately, irrespective of the costs, may seem like a no-brainer. But given the huge number of people and regions dependent on coal, the reality is more complicated. Take India, for example. A transition of this magnitude in that country would likely eliminate most coal mining jobs—a sector that provided 8.4 million jobs in India and elsewhere in 2021.

An energy transition away from coal needs to be a just one—that is, it must mitigate the risks of job loss and other negative impacts on workers employed in the coal sector in countries like India, Indonesia, and South Africa. To do that, it will have to be planned primarily around the people who are dependent on coal.

Can renewable jobs replace coal jobs?
Not only do just transition plans—including the retraining of coal miners to ensure employability—protect fairness for the workers who are affected, but they are also important for increasing public acceptability for the move away from coal to clean energy. That’s not only because coal miners constitute an important voter base. Indeed, these plans speak to the public’s conviction that the high cost of moving away from fossil fuels must not be borne by those who are most vulnerable to job loss.

The policy discourse in India favors using the renewable energy sector as a safe haven for jobs lost in coal mines. Policy priorities are hinging on renewables to create millions of jobs in India. Ernst & Young reports, moreover, that in India, “the states which are likely to be most impacted by the transition in the short term have huge potential for renewable energy which can be leveraged to create job opportunities for workers after re-skilling.”

Location is important; evidence from developed countries shows that coal miners do not prefer to migrate when laid off, and have historically not been compensated fairly. Coal miners who lose their jobs are often older, less skilled, and possess strong links to their local communities. In India, too, there is no precedent for displaced coal miners to be provided fair resettlement and rehabilitation support.

But will local employment in renewables, namely solar and wind, be enough to secure a just transition?

To make an assessment, I estimated the future potential magnitude of local employment in the solar and wind sector, while acknowledging that workers may transition to jobs in other sectors. This methodology can be expanded into other sectors, such as hydrogen, geothermal, bioenergy, or sectors outside of energy.

Does the math work out? The short answer is: It depends on where.

Modeling India’s transition from coal to solar and wind
There are 459 operational coal mines spread across 51 districts in 12 states in India. A host of factors determines the potential to replace coal production with utility-scale solar and wind projects at each mine. I looked at two: the availability of solar and wind resources (the sun and the wind) and the availability of land. In India, land use is especially important; renewables have to compete with many other uses, even as they face tricky debates over livelihoods, land rights, and more.

Putting together data on average solar and wind availability, favorable land use classes, and coal mine locations, you get a map of potential transition regions (See Figure 1 below).

From Coal to Wind New map buffer

The zones marked in red are buffer areas within a 20-kilometer radius of an existing mine, so that the workers would not likely have to move locations.

Incidentally, they all either meet the floor for solar power of 4 kilowatt hours per square meter per day on average over the long term or the baseline wind speed of 6.9 meters per second on average over the long term or both.

Finally, although there is little consensus in India regarding the type of land that can be used for the generation of renewable energy, some area within these buffer zones is listed by ESRI as bare ground or rangeland. For wind power, in addition to wasteland, cultivable land is also used.

To estimate the jobs these sites could generate compared to the jobs lost, I combined land data with data on operational coal mines from Sandeep Pai, who filed multiple Right to Information act applications with the Government of India, to create a detailed dataset of existing jobs in the coal sector. To estimate gains (or losses), I multiplied solar and wind potential with the highest-end estimate of jobs per unit of renewable energy produced at any given site, as reported in this study. The resulting gained jobs can broadly be distinguished between manufacturing jobs—like manufacturing solar panels, which are relatively more independent of location—and operations and maintenance (O&M) jobs, which are location-specific (that is, around a coal mine). The permanence of O&M jobs in the solar and wind power generation industry is similar to that of O&M jobs in coal. Still, not all jobs have a one-to-one substitution, and some of the jobs produced will be easier to transition into than others.

How Coal and Renewable Jobs Stack Up

As of 2020, the 51 coal-producing districts in India directly employed 743,601 people. Detailed subnational data from Coal India and its subsidiaries show that these jobs are predominantly concentrated in the east of the country, with the top ten districts for coal mining jobs in the east, including in Jharkhand, Chhattisgarh, Odisha, and West Bengal. These four districts alone accounted for 75% of the total jobs and for the production of 466 MT of coal. (Only one of the top ten districts—coming in at tenth place—was not in the east, Maharashtra.

Dhanbad, Jharkhand; Korba, Chhattisgarh; and Paschim Bardhaman, West Bengal, were the top three localities for direct employment in the coal sector, with 122,348; 91,106; and 68,352 jobs, respectively.

All of India’s coal-producing districts have the potential to create jobs in the renewables sector, especially in the solar industry (only Bhavnagar and Kachchh in Gujarat have the potential to generate wind energy).

Among the coal-producing districts, Barmer and Bikaner in Rajasthan and Kachchh in Gujarat are the top three districts for renewable energy-related jobs, with 636,683; 574,042; and 579,396, respectively. Surat in Gujarat, Tinsukia in Assam, and Deoghar in Jharkhand have the lowest potential to create solar and wind energy-related jobs at 760; 1,147; and 1,742 jobs, respectively.

Fifteen districts (producing 62% of India’s coal) do not have enough jobs in the wind and solar sector to absorb workers who would be left jobless during a transition away from coal. On aggregate, these are larger producers of coal than the districts that would have a job surplus, and they tend to be in the east of the country. Korba, India’s top coal-producing district, is also in a deficit of 35,566 jobs. Dhanbad in Jharkhand has a deficit of 105,290.

Of the three districts with the highest jobs surplus, all are in Rajasthan, in India’s west. In fact, Barmer in Rajasthan, which produced only 5.6 MT of coal in 2020, has the highest surplus at 67,754 jobs.

India’s Dependence on Coal Goes Deeper than Energy

Central to India’s transition away from coal is the issue of employment. In 2022, the International Energy Agency (IEA) reported that, while a clean energy transition could create additional jobs, these may not be located close to coal miners. That fact is abundantly clear in India.

And as stark as the numbers are here, the true mismatch may be even greater. Jobs in the informal economy could dry up, too, when coal jobs do. Millions of people rely on the informal economy surrounding coal in Indian states. For instance, rickshaw pullers may earn $3-$7 to make a 60km roundtrip to transport between 15- 450 kilograms of coal to the nearest city. By itself, the informal economy (third-party vendors, transporters, laborers) around coal likely increases dependency on coal to 20 million people.

And then there are the taxes, subsidies, and revenue. Coal-producing districts receive revenues in the form of rents and taxes from coal mines. The central government also established the District Mineral Foundation Funds in 2015 to collect funds from mining companies for mining-affected districts to be used for the welfare of the community and to protect the environment. Between 2015 and 2021, 40% of these funds ($3 billion) came from coal and lignite production.

India needs to draw down its coal-related emissions. But rather than assuming all workers left jobless by the transition will find immediate employment with renewables, policymakers must get serious about identifying additional employment opportunities and compensation packages and to provide the resources necessary for workers to shift away from coal successfully. They must also consider the replacement of revenue streams for community welfare and environmental protection currently provided by the production of coal.