What is Workers’ & Communities’ Dependency on Coal-fired Thermal Power Plants?

ISSUE BRIEF

Assessing Worker and Community Dependence on Thermal Power Plants

04 July, 2024 | Energy Transitions

Gunjan Jhunjunwala, Tarun Mehta, Ganesh Dileep, and Muskaan Malhotra

Suggested citation: Jhunjhunwala, Gunjan, Tarun Mehta, Ganesh Dileep, and Muskaan Malhotra. 2024. Assessing Worker and Community Dependence on Thermal Power Plants. New Delhi: Council on Energy, Environment and Water.

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Overview

This study examines workers' and communities' dependence on coal-fired thermal power plants (TPPs) and their vulnerability to its repurposing or decommissioning. It offers recommendations for citizen-centric planning in the context of a transition, with a focus on ‘retrain to retain’ workers and creating employment opportunities for women and other community members. To enable an understanding of how the various actors within a TPP interact, the study employed the case study methodology. The plant characteristics are largely generalisable with other plants but these findings are most relevant for large, non-pit head plants located far away from densely populated regions.

Key Findings

The presence of diversified livelihood options in close vicinity to the TPP, such as agriculture, urban clusters, and other TPPs, significantly reduces worker and community vulnerability to repurposing.
Informal contractual workers are more vulnerable to repurposing as they are least likely to have a written job contract that specifies a terminal clause and notice period, access formal skill development opportunities, and receive other social security benefits from the power plant in the event of its closure.
Most workers at TPPs are either skilled or semi-skilled. It is in the interest of the repurposed plant to ‘retrain to retain’ these skilled and semi-skilled workers. Developing and facilitating access to worker responsive skill development programmes will be critical for their upskilling.
A baseline skills assessment can help identify workers and community members that can be retrained and upskilled. Skilling initiatives must complement their existing skills, have clear job opportunities, and match wage returns.
Energy production through thermal power plants remains male-centric, with negligible participation of women in operation and maintenance roles. Developing clear gender metrics for skills assessment and training is imperative for improving their employment outcomes in the repurposed scenario.
The plant provides income opportunities for induced livelihoods and contractors. Self-reported incomes from these businesses range roughly between INR 15,000 (USD 179) and INR 20,000 (USD 239) monthly, depending on the trade.

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Gunjan Jhunjunwala

Programme Lead

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“A citizen-centric plan to repurpose thermal power plants is important to ensure its continuous operations. There is much to gain by ‘retraining to retain’ semi-skilled workers, continuing social security benefits to the community and creating micro-entrepreneurship opportunities for women in the region.”

Executive Summary

At an installed capacity of 218 GW in 2024, coal-fired thermal power plants (TPPs) constitute over 70 per cent of India’s annual electricity generation and directly employ 3.2–4 lakh individuals across the country (CEA 2022¹ ; CEA 2024). Presently, 32 GW of coal and lignite capacity – or approximately 15 per cent of the installed capacity – is 30 years or older (ibid.). These units are in the end-of-life stage and will need to be repurposed or decommissioned.

Repurposing plans for TPPs focus on three aspects: affordable and suitable alternative technologies, quality finance, and citizen-centric planning. Our estimates suggest that ~3.2-4 lakh individuals are currently employed across TPPs in the country (Authors’ analysis based on CEA (2022, 2024)). While they constitute a small percent of the workforce in India, decommissioning or repurposing of TPPs will have significant impacts on the local regions. (Dsouza and Singhal 2021; Dsouza 2021) To mitigate this impact and ensure a smooth transition, our report focusses on enabling a citizen-centric transition of TPPs. Citizen-centric plans aim to realise a ‘just’ transition (JT) – that is, a transition to cleaner energy without compromising social and economic vulnerabilities (The World Bank, n.d.). Thus far, these plans and frameworks have largely focussed on the source of coal production – that is, coal mines (NITI Aayog 2022; Mitra, Singh and Victor 2023; Banerjee 2022) – but they also needs to be devised for high-end use sectors for coal – TPPs. There is a need to develop distinct JT plans for TPPs and coal mines since the two differ in their occupational structures, transition timelines, the scale of surrounding economic activities, repurposing options, the inter-generationality of workers, and the nature of labour unionisation.

Our report examines workers’ and communities’ dependence on coal-fired TPPs and how they might be affected if TPPs are repurposed.² This understanding is necessary to mitigate the people-related challenges that may arise in implementing a repurposing plan.³ We explain dependence and vulnerability by examining the nature of work and the types of workers at a TPP, the gender composition of this workforce, and the factors that make workers (direct⁴ and induced⁵ ) and communities dependent on TPPs not just for their livelihoods but also for other social benefits⁶.

Using qualitative research methods, we designed an in-depth case study of a state-owned TPP^7,8 to explore these differentiated dependencies among workers and the surrounding community. To create a robust case study that allows for cross-examination of the TPP, we designed a carefully curated sampling strategy. Figure ES1 illustrates the respondent categories and sample size (totalling 55). We assessed the dependency and vulnerability of different categories of stakeholders in the event of plant repurposing. Figure ES2 demonstrates the parameters we used to determine dependency on a TPP. Data gathered through in-depth interviews with each respondent category, organised and analysed along a framework-analysis matrix, revealed the following insights.

Figure ES1 Sampling distribution of respondent categories

Figure ES2 Factors for assessing dependency on TPPs

A. Key insights

Our study finds that there is no uniform correlation between dependence and vulnerability across categories. For some categories such as permanent workers, local contractors and formal contractual workers – high dependence accompanies low or varied vulnerability. However, the high dependence of informal contractual workers and induced livelihoods translates into high vulnerability to TPP repurposing. Women and local community show a different pattern of dependence and vulnerability. While they are less dependent primarily because of negligible employment at the plant, their vulnerability is varied and is based on their ability to access employment through an active push to create livelihood opportunities for them. The key insights on how each category is dependent and vulnerable are presented in Figure ES3.

Figure ES3 Workers and the surrounding community show varied dependency and vulnerability in case of the repurposing of the TPP

Our study revealed the following nuances in each category’s dependence on the TPP and vulnerability to repurposing:

Contractual workers – including informal workers⁹ – and induced livelihoods are dependent on the TPP and vulnerable to repurposing: Contractual and informal workers engaged in the operations and maintenance (O&M) of TPPs mainly possess niche skills specific to the plant’s machinery. For these workers to retain employment in the repurposed plant, whose O&M will be vastly different from the TPP, or to gain alternate employment, reskilling or upskilling efforts will be necessary. Here, informal workers will require greater support owing to lower educational levels, uncertified skills, and limited access to formal reskilling opportunities. In the case of induced livelihoods, local enterprises’ dependence stems from their reliance on spending by TPP workers and the local community. If repurposing results in a shrinking of the workforce employed at the plant¹⁰ and in other ancillary services, induced livelihoods will be impacted negatively.
Permanent workers and local contractors are dependent on the plant, but they are less vulnerable to repurposing: Permanent workers rely on the plant for employment, but they enjoy benefits such as access to retraining, redeployment, or severance pay if their current roles are impacted, thereby making them less vulnerable. Local contractors earn by supplying labour or leasing machinery or vehicles to the plant. Their services will remain in demand if the new production processes are equally labour-intensive and if they can redeploy the machinery they currently lease to the TPP. Contractors may also be able to diversify to other economic sectors on account of their accumulated capital, assets, and ability to supply labour to other industries.
TPPs employ a negligible number of women, whose ability to engage in gainful livelihoods is impacted by the plant: We found that few to no women work in TPPs in either technical or labour intensive roles. High pollution levels in the area prevent women from practicing alternative livelihoods, including agriculture. Further, long distances to the nearest town impact their ability to seek jobs.
The local community finds employment at the plant and remains vulnerable to repurposing: TPPs employ a combination of local and migrant workers. While the plant identified for our study primarily employed migrant workers,¹¹ discussions with officials at other TPPs revealed that at least a third of the workforce comes from local communities. Many local workers are trained to perform relatively low-paying O&M roles at the plant. Their jobs will be at risk in case of a transition. A JT plan must prioritise ensuring gainful employment for such workers in the repurposed plant or provide them alternative jobs in the vicinity, given their cultural and historical connection with the land used by the plant.
The local community is dependent on the plant for social infrastructure, but it is also impacted by the environmental pollution it causes: The sampled TPP contributes to social infrastructure in the surrounding areas, such as healthcare and educational services, which are accessed by all staff, permanent and contractual (both formal and informal) – the latter with the help of contractors (especially for healthcare services). Healthcare services do not include highly specialised care such as that required to treat ailments resulting from air and water pollution. While the educational services supported by the TPP span primary schools to vocational training institutes, these are mostly accessed by the local community. Most migrant workers do not access educational services, since they have relocated to the plant site without their families. If the repurposing leads to reduced pollution, the local community stands to gain. However, the healthcare and educational services must be continued regardless.

Even informal workers possess niche technical skills that need to be ‘retrained to retain’ in the repurposing scenario.

These critical insights reveal workers’ and communities’ varying dependencies on a TPP. A holistic JT framework for TPPs in India should clearly demarcate areas of intervention, identify the corresponding governance approaches required for these areas, and offer financial estimations and pathways to meet these needs. Our study provides a vital first step in this direction and recommends the following interventions, with a greater focus on enabling workers and communities to find employment after the repurposing.

B. Recommendations

Our recommendations are focussed on ‘retrain to retain’ workers by bringing existing skill development opportunities closer to affected workers. We also suggest ways to improve livelihood opportunities of women and other community members.

Align funding and facilitate ease of access to initiatives across skill development and social safety: To ensure that workers and communities affected by repurposing have access to skilling programmes and essential social safety schemes, (i) spending from state and centrally sponsored schemes can be aligned with corporate social responsibility (CSR) activities and support from multilateral development banks (MDBs), (ii) consolidated databases such as myScheme and UMANG, which facilitate one-stop access to social safety programmes, should be strengthened and promoted, and (iii) access to these programmes can be improved by engaging community resource persons for enrolling affected workers and community members.
Design worker-responsive skill development programmes: In addition to the existing placement related targets established under the Common Norms for Skill Development Schemes, monetary incentives should be provided to training partners engaged in training ex-TPP workers to improve accessibility to skill development programmes (GoI 2015). To enhance worker participation in skilling programmes, targeted skill development initiatives must complement workers’ existing skills and communicate the expected work opportunities and wage returns from the training
Develop clear gender metrics for baseline assessment and the skill development programme: Skill perceptions and aspirations within the local community, and among women in particular, should be surveyed using a genderdisaggregated assessment. Skill development programmes must also include training for women in otherwise male-dominated job roles in flexible, nonresidential, and self-paced formats. In conformance with the objectives of the National Policy for Skill Development and Entrepreneurship (2015), skill development initiatives must be encouraged to develop gender metrics in terms of the training and placement rates of women (MSDE 2015).
Independent, third-party entities should conduct a baseline skills assessment survey among informal contractual workers and the local community: A survey to assess the number and skills of informal contractual workers engaged at the TPP must be conducted. This will help establish a skills baseline which can be used to design skilling initiatives to meet the needs of the repurposed plant and prepare workers for engagement in an alternative industry. This survey can be conducted with sector skill councils and the district skill committee. It can also cover communities dependent on the TPP for induced livelihoods.
A skills information portal should be maintained at the plant level: A single-window management information system (MIS) portal can be established to facilitate skill-matching between displaced workers and the skills required in the repurposed plant or in alternative industries. This portal can also be connected to myScheme and UMANG to help workers identify relevant government skill development initiatives and training partners for skill training.
Benefits from the repurposed plant must be redistributed among the local community: Repurposing existing assets for alternative energy uses will allow for the reemployment of a part of the existing workforce and will perpetuate demand for small businesses in the vicinity. To mitigate social resistance to plant closure, the local community must be assured gainful employment by promoting extensive skill development initiatives. If there are practical limitations to offering employment, social infrastructure that is accessible to all in the community must be provided instead. The management of the repurposed plant will need to assure the local community that it will provide healthcare and educational services as well as reliable power (if the repurposed plant continues to generate electricity).While these recommendations call for further assessments, our study helps to further the extant discourse in planning citizen-centric energy transitions by demonstrating that a JT plan for the coal sector will need to include the particularities of TPPs for layered and comprehensive planning.

Endnotes

¹Direct employment based on authors’ analysis of the installed capacity of various power plants and employment factors provided in CEA (2022).

² Here, the TPPs we refer to are those that are in the end-of-life stage. We are not proposing any early retirement of TPPs. In contexts where repurposing is not possible due to various reasons, TPPs typically look to decommission.

³Several journalistic accounts have highlighted that TPPs face significant resistance from communities, which impacts the power plants’ plans of either inaugurating a new unit or repurposing existing infrastructure (The New Indian Express 2021; Sandhu 2016).

⁴ Those working at the TPP.

⁵Those not working at the TPP but whose livelihoods may come from the local spending of TPP employees.

⁶ Our study examines both direct and induced dependency on TPPs but does not examine indirect dependency (sectors that use a by product of the TPP such as fly ash–based cement and brick factories).

⁷The name of the TPP has been anonymised intentionally.

⁸ The identified TPP reflects the transition journey of most other TPPs in India that have replaced old and inefficient units with newer units either within the plant premises or in the vicinity. Housing both old and newer units, the sampled plant itself is operational.

⁹ The informal contractual worker category can also be understood as casual wage labour. As per the National Sample Survey Office (NSSO) definition, casual wage labour is “(a) person who was casually engaged in others’ farm or non-farm enterprises (both household and non household) and, in return, received wages according to the terms of the daily or periodic work contract, was a casual wage labourer” (NSSO 2015)

¹⁰ As per CEEW analysis through stakeholder consultations, the overall demand for the workforce will decrease if the plant were to repurpose to battery energy storage systems options and will mostly remain the same if the plant were to be repurposed through a complete fuel change, for instance, to biomass.

¹¹ Our data suggests that this predominance of migrant workers can be attributed to the threat of local community resistance to the plant’s day-to-day activities.

FAQs

What is the largest source of electricity in India?

India's largest electricity generation source is coal-based thermal power plants (TPPs). According to the latest data from CEA, TPPs contributed ~75 per cent of total generation in FY 2024.
How many people are employed across coal-based TPPs in India?

Due to large-scale contractualisation, the exact number of TPP workers is unknown. However, CEEW estimates suggest that the total strength may be between 3.2 and 4 lakh for the current production capacity.
What are some of the repurposing alternatives for coal-based thermal power plants?

The infrastructure and land from old TPPs can be repurposed for various alternative uses, including energy (generation and storage), agriculture, tourism, or other industrial/ commercial uses.
What does citizen-centric transition mean?

A citizen-centric transition accounts for the social and economic vulnerabilities that the workers and communities dependent on a TPP will face if it is repurposed. This includes providing gainful employment to the local community, reskilling existing human resources for the repurposed scenario and alternative industries, and continuing provision of social infrastructure such as education, healthcare, roads, water, and electricity.