By Shravan Sampath
One of the important takeaways of the inter-governmental COP26 Glasgow climate pact was an agreement on the time-bound transition from coal-based power to renewable energy. India has already set itself a target of increasing its renewable capacity from 150 gigawatts (GW) now to 500 GW by 2030. While this quantum leap by itself would require significant investments, the COP26 also recognized that this would result in a shift from a coal-based economy to renewables. This transition needs to be planned well in advance as coal mining starts winding down so that the affected populace gets a right to a reasonable livelihood.
Studies estimate that about 20 million jobs are dependent on the coal economy in India. This is about the size of the entire population of Sri Lanka. As renewable capacity starts to ramp-up and coal mines start to reduce their production and taper off, the local economy would be left stranded. It is imperative to provide livelihood transition to this large population, lest one risk widespread economic and social unrest in the coal-belt areas of India. One has seen examples of regions like Wales in England that stopped coal mining over 3 decades ago, and the economy has been struggling to get back on its feet even now. In this context, it was good to see that the Ministry of Coal has recently set up a separate division for ‘Just Transition’ to formulate and implement sustainable mine closure plans.
Back in 2013, as the subject of mine closure was gaining prominence, the Ministry of Coal set up its guidelines for mine closure, but the thrust was more on the ecological aspects such as greening or refilling coal mined areas. The human cost was handled by way of a monetary contribution by the mine operator. Nine years later though, the Ministry of Coal seems to be taking a more holistic approach. As part of the ‘just transition’ plan, a plan would be formulated and two districts would be taken up for pilot implementation. It is understood that these two districts would be Bokaro in Jharkhand and Korba in Chhattisgarh. Both these districts have a combined 38 mines, of which 18 are non-functional, and others would be phased out over time. This would act as a good laboratory to test the impact of “Just Transition” and provide a roadmap of scaling up.
In the longer term, “just transition” would need to incorporate more than just ecological aspects or maintaining local infrastructure like schools or roads. The transition would be really challenged while trying to find ways to provide sustainable livelihoods to the local population. Very few countries have managed to get this right. The magnitude of the task can be gauged by one of the prominent transitioning economies, the coal-intensive economy of Poland. Poland has received $3.5 billion from the World Bank European Union green transition fund to rehabilitate just 90,000 people who will be affected in the transition. This would be less than the people affected in Bokaro district alone.
The enormity of the task that India faces must not be underestimated and the government must devote its best resources to enable this. No amount of aid would be adequate. The government must dig into its own coffers by perhaps reprioritizing the coal subsidies of over Rs. 3 lakh crores that it has given out since 2014. Not only are we looking at reskilling 20 million people, we would need to find alternate livelihoods for them in a job market which is looking grim even otherwise. The Indian coal majors are trying a few offbeat ideas. An example is the partnership between Northern Coal Fields and NTPC to develop a solar plant in the Nigahi coal mine of NCL in Singrauli district of Madhya Pradesh. Further, it is observed that Jharkhand and Chhattisgarh both have been early off the block with innovative new renewable energy policies, possibly to redefine their economy in the renewable era. More such policy-level innovation and partnerships are required to develop alternate transition strategies.
For instance, it is well-known that most of the coal bearing areas are well connected to rail logistics and excellent highway networks that have been built for coal transportation. There is also a large skilled and semi-skilled manpower available for employment. These areas could be notified as industrial zones for value added industries in related areas such as steel, cement or aluminum. Subsidized electricity could also be provided. The Madhya Pradesh and Chhattisgarh governments have already got deeply subsidized rates electricity for industries, and this has resulted in an increased influx of industries into these states. This must be sustained to provide for increased industrialization in these parts.
India has always excelled at finding India-centric solutions to India-specific problems. This would be a great time for Indian administrators both at the central and state level to put on their thinking hats and evolve innovative solutions to transition.
Author is CEO of Oakridge Energy and is an energy sector professional with around 2 decades of experience across thermal and renewable energy with leading Indian and global energy majors.