As countries across the globe work towards doubling energy efficiency (EE) improvements by 2030, it is important to think about not just “how” it will be achieved but also “who” will be instrumental in delivering this ambition. The vitality of EE has long been perceived as being limited to the extent of meeting the sustainability targets and achieving the overall net-zero goal. At present, there are limited estimates of EE employment for countries such as India that are spearheading the EE agenda. This, in turn, highlights a blind spot in the clean energy transition narratives.
India faces the challenge of balancing between meeting its rising energy demand, achieving its enhanced Nationally Determined Contribution (NDC) targets by 2030, securing energy independence by 2047, and attaining carbon neutrality by 2070. EE carries immense potential to contribute to all these through not only decarbonization but also through economic development via employment creation and thus, skill development. Reaping the benefits of India’s demographic dividend within the window of opportunity (estimated to peak by 2041), hinges on the distillation of employable skills. In fact, the recently announced Employment Linked Incentive (ELI) scheme by the Indian Government is a testament to the fact that employment generation, particularly in the manufacturing sector, is high on the policy agenda.
A recent study by the Indian Council for Research on International Economic Relations (ICRIER) estimates EE-relevant employment in the Indian manufacturing industrial sector. Using the Periodic Labour Force Survey (PLFS) as the data source, the analysis found the quantum to stand at 50.32 lakh in 2023-24, which forms an 8 percent share of the total manufacturing employment for that year. The term EE-relevant employment here includes jobs in manufacturing and production sectors that directly contribute to enhancing EE. What was interesting to note was the skill-based disaggregation results of the estimated employment. It was found that about half of the estimated workforce (50.6 percent) falls under the high-skilled category, with medium-skilled workers broadly taking away the other half of the pie. The analysis breaks the common perception that the field of EE is dominated by low-skilled workers. If anything, the results underscore the skill-intensive nature of EE. It reinforces EE’s potential not only as a significant source of employment but also warrants the need for concerted efforts targeted at equipping the workforce with the necessary competencies.
Skill development and employment generation are often discussed complementarily. The extension and restructuring of the Skill India Mission, with an outlay of INR 8800 crore, marks the country’s continued commitment to skill development in general. However, the effectiveness of the multitude of skilling programs and schemes operating within the country, in terms of creating job-ready candidates, has often been contested. It has been argued that the augmentation of the budgetary allocation for such programs has not been met with a commensurate rise in employment of the trained individuals in question. In other words, what the system has resulted in is a pool of professionals with certifications, lacking the required proficiency, thereby impacting their employability quotient. A similar storyline also exists in the case of EE. There is evidence that suggests that many firms do not hire from government-run skilling programs. The main reasons for the same include a lack of practical on-floor capabilities, stemming from an apparent mismatch between the training curricula and the technical requirements of industrial EE interventions.
The on-ground realities are reflective of the fact that even with industry representatives contributing to overall curriculum development and offering apprenticeship programs, there is a gap between industry needs and skills available for EE. This, in turn, hints at a fundamental flaw in the ecosystem. It appears that EE-specific training courses, if at all offered, are more often than not subsumed within renewable energy modules as opposed to being offered as a separate specialization. This results in occupations such as solar PV installers or wind energy technicians taking over the spotlight, while industrial EE expertise assumes a backseat. This merging of EE into adjacent subjects risks overlooking a crucial segment of clean employment. It calls for a curriculum reform along with the development of industry-led training modules to bridge the apparent gap and improve the employability of the country’s existing and future labour force. The recently approved National Scheme for Industrial Training Institute Upgradation and Setting up of five National Centres of Excellence for Skilling is a much-needed step in the right direction. While it aims to revamp courses offered to the local workforce such that they align with industrial human capital needs, only time will tell how effective it will be. Meanwhile, akin to the skill gap assessments that have been carried out in the case of conventional energy sources and renewable energy, a similar exercise is required for EE-relevant employment across all sectors in India. Only then can we truly unlock the opportunity of creating clean employment that EE undoubtedly offers.
There is an urgent need for the policy discourse to highlight EE’s contribution, and perhaps balance the overwhelming focus on the renewable energy sector. There are hardly any assessments that have tried to document EE employment in India. This stems from the lack of a universal definition of what constitutes EE employment, as well as the absence of standardized frameworks or databases that categorically focus on EE to enable such clean employment assessments in India. Unfortunately, bereft of such an assessment, the skill development story of the clean and, by implication, the green sector would remain incomplete. It would be challenging to ascertain the direction in which workforce training and skilling programs should be oriented towards in the sustainable jobs sector, to guarantee gainful employment opportunities.
(Views expressed are the authors’ own and don’t necessarily reflect those of ICRIER)
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