Energy Transition in Jharkhand

India is the third-largest electricity economy. Its transition is critical for the transition of the
world energy economy.
Today coal remains a mainstay in the Indian power sector as it is accountable for about
two-thirds of all energy generation. It also supports industrial operations such as steel
production. At present, coal is the dominant fuel. However, to meet the international
commitments for reducing emissions, made while ratifying the Paris Climate Deal, India
has recently started focusing on innovations in renewable energy. Consequently, the future
of coal is more uncertain than ever. Soon, the retirements of capable power plants from
coal have the capability to exceed any new construction significantly. As a result, coal-fired
power generation potential will either stay flat or decrease.

As per the Ministry of New and Renewable energy (MNRE), Jharkhand has the ability of a
cumulative solar energy generation capacity is 18.18 GW in Jharkhand (Deloitte, 2015).
However, renewable energy accounts for a tiny proportion of Jharkhand’s total electricity
production. The State has a total established capacity of 2.5 GW, out of which only 1.8%
comes from Renewable Energy Sources (RES). Renewable sources have contributed only
0.07% to the overall Jharkhand’s electricity generation in 2019-20 (CEEW and CEF, 2020).
This indicates high dependence of the State on coal as source of power generation. It is
important to note that the State occupies 1st position in coal reserves (Department of Mines
& Geology). The projection of demand for coal in the power sector will be at modest
growth, possibly flat. Perhaps even a decrease in the next ten years as renewable energy is
increasingly competitive, i.e., solar power in particular in India is very competitive in terms
of generation costs, and over time with better battery storage, grid management, and
demand management, we will likely see a reasonable effort to manage the intermittency
issue. All of these factors are eventually going to lead to a loss of livelihood for communities
that are dependent on the supply chain of coal for employment.


Even without the financial elements for coal, there are a wide variety of problems to
consider especially in the social and political issues associated with accelerating coal
phase-out in India. One big challenge is that India is a major producer of coal because it has
ample coal resources in its eastern parts in states like Jharkhand. These resources provide
a financial basis for tens of millions of people in regions with very few alternative sources
of livelihood today, so in a state like Jharkhand, the entire employment infrastructure for

the people is somehow built around coal. All the key industries are there due to the coal
mines because of the capacity built around those coal mines, and as a result, these regions
are very dependent on the coal supply chain for employment.
There may be a chronic undersupply of jobs in comparison to the number of people looking
for employment. As a result, it isn’t unusual in some of these coal-dependent areas one
person working in the coal industry is somehow supporting anywhere between 5 to 25
other people in terms of basic income and survival, so when you add all this up, we’re likely
talking about tens of millions of people who today are dependent on income from coal
mining and the industries around it.
The contribution of coal in Jharkhand is an estimated 10% of the state’s GDP, which acts as
the backbone of the state’s economic growth and revenue generation. The state economy in
the power sector is all turning against coal as it becomes less competitive than the
alternatives; there remains the issue of managing the grid in question, but that will
improve over time. According to an iFOREST’s study, the most important coal producing
district, Ramgarh, is already experiencing financial losses as most of the mines and
qualified power plants in that district are making a loss in revenue. The situation will
worsen once the government launches a phase for closure of coal mines.

The primary issue is the social disruption in an area that has historically suffered from the
violent insurgency. If hundreds of thousands of people lose their employment and their
source of livelihood, there might be an increase in violent, and anti-government activity.

Policy Recommendation
The government needs to monitor the social issues related to the coal sector because they
will be the biggest hurdle to overcome, much more so than the economics or the technical
Policymakers need to design policies to maximize job creation by fostering mandatory
employment in public renewable energy projects and establishing favorable conditions for
women and marginalized societies.
Government agencies and political decision-makers need to identify the skill gap and
promote upskilling and reskilling schemes according to the community-owned renewable
energy projects to improve the value chain with the emergence of new professions.
The transition will unlock a new demand for skills. Policymakers need to design a
mechanism to stimulate the growth of jobs where the acquired trained skills are put to use
by educating the local people for the transition.
At the beginning of the training, we need to be concerned that the people currently
dependent on the coal infrastructure are still in need for their daily livelihood. So the
policymaker needs to initiate an innovative system where they receive constant technical

support and can meet their daily requirements for survival. Agencies need to utilize and
incentivize educational certificate (minimal and efficient duration for training to equip
necessary skills for local people, especially with financial distress) in generating job
opportunities in the renewable energy projects within the various Government schemes.
The tone of regulation in the coal sector is reactive, so it needs to be a bit more proactive
approach and sort out the factor in all of these innovation waves that are coming from the
transition process, and the regulator needs first to know what all of this is about in terms of
its social and economic issues.
The overarching framework guiding all these innovations at the state level is our SDG goals,
i.e., decarbonization with the ornament of renewable energy coming in that involves all the
stakeholders in the region to participate and contribute with a new wave called digitalization.


About Vanlalngaihawma (Intern, CIRC)