In a pleasant surprise for these otherwise maligned topics, just two minutes into the Union Budget Speech of 2022, the terms “energy transition” and “climate action” made an appearance. In fact, Finance Minister Nirmala Sitharaman announced them as one of the three goals of “Amrit Kaal”, or the 25-year period leading up to 100 years of Indian independence to be marked in 2047. By the end of Sitharaman’s reading of the Budget allocations on 2 February, Central bolstering of renewable energy (RE) in India was evident—₹19,500 crore was set aside for a Production Linked Incentive to promote domestic manufacturing of solar Photovoltaic technology (PV), a battery swapping policy was announced for electric vehicles, and four pilot projects were discussed for coal gasification, amongst others.
These announcements towards low-carbon development fall right in line with India’s ‘Net-Zero by 2070’ pledge made at the 26th Conference of Parties (COP26) held at Glasgow in November of last year. The figures also reaffirm this commitment—at ₹6,900.68 crore, the Ministry of New and Renewable Energy (MNRE) received a significantly bigger budget than what was allocated for the Ministry of Environment, Forest and Climate Change (₹3,030 crore) and the Ministry of Coal (₹393.24 crore).
Yet, while the Centre’s commitment to the transition away from fossil fuel is promising, what happens to those employed in the coal and oil sector? For India, this becomes a significant question, since these polluting fuels have a sizable presence across the country—coal mining, oil and gas industries, thermal power plants, refineries, and steel and cement production are sources of income for 120 of 718 districts. Losing the jobs these sectors produce could directly affect at least 21.5 million people employed by them. But, Sitharaman assured those listening that India’s transition to renewable energy is no cause to worry. “This [transition] strategy opens up huge employment opportunities and will take the country on a sustainable development path,” she said in her speech.
As India attempts to inch closer to the promises it made at COP26, what kind of job opportunities can be expected with the growth of the renewable energy sector? More importantly, who will benefit from them?
What Does A Job in the Renewable Energy Sector Look Like?
“The Budget announcements definitely show a lot of investor faith in the renewable energy sector in India. Allocating [sufficient] money does have the potential to boost long-term job opportunities,” says Dr. Akanksha Tyagi, Programme Associate at the environment think-tank CEEW. Numerically speaking, Tyagi’s co-authored research shows that if India achieves its goal of developing 500GW of RE capacity by 2030, it can create 3.4 million long-term and short-term jobs in the process.
Such jobs can be direct, like those connected with the design, construction, and installation of, say, the windmills used in wind-powered RE. They can also be indirect, such as those involved in manufacturing equipment, the supply chain of raw materials, and in the banking sectors that facilitate the financing of such projects. Tyagi also mentions “induced” jobs—such as those linked to eateries, a market, and residence facilities—that may come up close to a large solar farm to support the staff working there.
Taking a more global stance, Sandeep Pai, a researcher at the Just Transitions initiative at the Centre for Strategic and International Studies, has estimated that if rises in global temperatures are kept well below 2℃, then by 2050, renewable energy can create 26 million jobs worldwide. In this futuristic model of a sustainable world, Pai calculates that most of the RE jobs will be generated under operations and maintenance, followed by manufacturing. On the other hand, those involved in the extraction of fossil fuels and the oil refinery sector will witness job losses.
Now, of these 3.4 million potential RE jobs in India, 80% are estimated to be generated in the scaling of rooftop solar energy and mini- and micro-solar grids—both of which are termed as decentralised renewable energy (DRE). “The usual assumption is that large scale solar or wind projects might generate more employment, but this is not the case,” says Tyagi, marking a key difference between jobs created and the workforce needed to sustain a sector. “One worker can do more than one task, since some of the tasks [needed to build RE infrastructure in India] might be short-term. So, while there might be an increase in large-scale projects like solar farms in the future that will need an immediate workforce, they will not create many long-term jobs.”
Smaller grids and rooftop solar projects generate more employment because they are distributed across geographies. On the contrary, large-scale solar plants and solar farms—also called utility scale—would be responsible for only 16% of jobs in the long-term, with the wind sector contributing an even smaller 4%.
Last year’s numbers also mirror the same trend. As of August 2021, over 1.11 lakh workers were employed across RE projects in business development, design, construction and commissioning, and operations and maintenance. Here, rooftop solar emerges as the champion employer—despite contributing only 15% of the total solar capacity, it employed more workers than the utility-scale solar projects. Yet, whether these smaller-scale projects take off again depends on the funds allocated towards them.
“Decentralised Renewable Energy (DRE) is one of the most important ways to create jobs in the renewable energy industry, especially when we look at smaller tier 2 and tier 3 towns,” says Yashasvini Mathur, Senior Analyst with Swaniti Initiative. “DRE is also a good option for women since many DRE jobs that work on decentralised or franchise models often do not require formal schooling or education levels to perform them.”
However, the current Budget does not share the same enthusiasm for smaller DRE projects.
The funds allocated for off-grid and decentralised solar power—which is where more jobs will be created—have unfortunately seen a fall. In 2021, ₹237 crore was set aside for this sub-sector, while in the 2022 Budget, only ₹61.50 crore was allocated. Off-grid biogas has also seen a fall from ₹70 crore in 2021 to ₹30 crore in 2022, and small off-grid hydropower saw the same allocation of ₹2 crore for both last year and the current fiscal.
This is disappointing, especially since decentralised renewable energy, including solar lighting and micro-grids, are becoming popular in rural areas—they have the potential to boost jobs in such areas. DRE resulted in the creation of 95,000 direct jobs in 2017-18, a figure estimated to increase this year.
But, in the path of this rural employment lies a challenge. “Primarily, most DRE organisations need business and salespeople. These are skills that are extremely difficult to train and recruit for, which becomes a challenge in the long run,” Mathur adds.
Stepping Up the Skilling
While introducing RE-specific technical modules in IITs and other engineering colleges could help create skills, another way of doing so, as the Centre has shown of late, is to impart these technical skills to the Indian youth. Since 2015, the National Institute for Solar Energy (NISE) has been running a 600-hour-long residential skill development program, where batches of students learn how to install, operate, and maintain solar power infrastructure. Called ‘Suryamitra’—or friends of the sun—this course also has a wind energy counterpart. So far, Suryamitra has trained almost 28,000 youth across the country.
“Over the last two years we particularly faced losses in conducting Suryamitra training sessions,” says Rashmi Kumar, associated with the Patna-based Beltron Telecom Green Energy Systems Ltd., a government-approved training centre. “During the lockdown, we received no funds from the government for the programme, and we had to bear the costs of hosting the 30-member batch. This year, we are waiting for the final terms of reference to be sent to us [from the government], after which we will decide whether or not to conduct the sessions.”
Kumar’s company has been hosting sessions since 2016, many of which are attended by rural populations from Bihar. In the years when funds arrive on time from NISE, Beltron managed to hold three batches a year; during the other drier years, they could train just one batch a year. The 2022 Budget paints a pessimistic picture on this front: the allocation to NISE has fallen to ₹16 crore, from last year’s ₹19 crore, indicating that there may be fewer or less-skilled employees trained under Suryamitra for the RE sector in the future.
Kumar points towards another challenge. “In Bihar alone, there are not so many job opportunities within the solar sector. So, after the course, students get offered jobs all the way in Gujarat or Maharashtra, that pay just ₹8,000 to ₹10,000 per month. For that amount, many do not find it valuable to move to a different state. Instead, they end up in non-RE jobs in the automobile or electronics sectors,” she says.
Apart from skilling, employment can be boosted by support for innovative clean energy solutions developed in rural India. ‘Powering Livelihoods’, a joint initiative between CEEW and Vilgrow, does just that.
Tapping RE Potential in Rural India
“Entrepreneurship fueled by DRE in sectors like agriculture, tailoring, and retail small and medium enterprises have tremendous opportunities for growth, especially when bundled with the policy initiatives of the government,” Mathur says. Powering Livelihoods enables the building of ecosystems for RE start-ups and helps them scale through financial support and an incubation programme. In the past, they have facilitated the scaling up of Dharambir Food Processing, an enterprise started by a former rickshaw puller. The food processor can peel, cut, juice, and extract the essence from fruits and other foods, all through solar power. Also in their portfolio is the women-centric start-up Resham Sutra, which uses solar-powered machinery for rural textile production spanning from cultivation at the farm to the final fabric. While Dharambir’s food processor has created approximately 2,300 direct jobs, Resham Sutra has trained 18,000 women to use the technology, contributing to a rise in their income.
For rural India, another strategy that Mathur recommends in her research, especially for low and unskilled workers is to include community-owned renewable energy projects within the purview of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). This would create direct employment within the RE sector while also ensuring a sense of ownership over the project from the communities who participate in building it.
Generating employment is also closely tied to the rigorous research of the sector’s potential. Unfortunately, funding for the same saw a decline in the Budget. In 2021, while ₹75 crore was allocated for research and development under the Ministry of New and Renewable Energy, less than 50% (₹27.5 crore) was utilised. This year, the budget for RE research has fallen to ₹35 crore. In fact, a 2021 UNESCO report reiterated India’s dismal contribution to research on the clean energy sector. Across research councils set up for defence, biotechnology, medical research, and earth sciences, amongst others, the report ranked research under the Ministry of Renewable Energy 12th—the very last.
This is not good news. “India needs research funding that can help create domestically apt RE products. For instance, now that domestic photovoltaic manufacturing is being encouraged, what type [of batteries] should we be creating? Will we be replicating products made in China or the United States, or can some [indigenous] research help innovate for robust technologies that are conducive for the country’s geographical conditions?” asks Tyagi. Such research would not only support India’s RE targets but also ensure that the green energy industry builds a long-term employment plan that can sustain itself in both rural and urban spaces.
Undoubtedly, this year’s budgetary allocation towards the Ministry of New and Renewable Energy is an optimistic step in the right—and greener—direction. But, a closer analysis reveals which sub-sectors of renewable energy might not benefit from this policy push, a loss that would also shape the growth of the sector’s employment. During the Budget speech, Sitharaman referred to green energy as a “sunrise” sector. But only an enabling ecosystem and a just transition towards RE would show if the sun shines on both jobs and millions of potential employees within it as well.
Featured image: Suryamitra trainees on a field visit during a training session; courtesy of Suryamitra.