COVID-19: Labour migration to pose short-term challenges for power, renewable energy sectors
The exodus of migrant labourers from major metro cities has given rise to a shortage of non-technical workers working in the energy industry and even if the government opts for a staggered lifting of the lockdown, the process of remobilisation would pose challenges for companies
New Delhi: The COVID-19 pandemic has pushed the country under an extended lockdown creating a cascading effect on economic growth but the labour migration caused by it is posing serious challenges for the power and renewable energy industries.
The exodus of migrant labourers from major metro cities has given rise to a shortage of non-technical workers working in the energy industry and even if the government opts for a staggered lifting of the lockdown, the process of remobilisation would pose challenges for companies, according to industry executives.
“Demobilisation of labour is still easy but remobilisation is not. Bringing people from Uttar Pradesh and Bihar in this current environment will be difficult. So, we will have major challenges in manufacturing operations which currently have been completely shut. I think even after this lockdown, the disruption to the business will be there,” said Ashish Khanna, MD & CEO, Tata Power Solar and President, Tata Power Renewables in an exclusive interview with ETEnergyWorld.
He added that if there is a possibility of a staggered release, the firm will not be able to upscale 200 to 1,200 employees in a two-month time, which is an original project schedule.
Also, apeaking to ETEnergyworld in an exclusive interview, Tata Power’s Managing Director and Chief Executive Officer (CEO), Praveer Sinha, said that as of now the company is doing fine and is fully supported by the contractual workforce but most renewable operation and maintenance (O&M) projects and thermal power projects need extended workforce and the concerns remain across the sectors.
According to Ranjit Gupta, Chief Executive Officer at Azure Power, deployment of labour will be a huge challenge given the restrictions on intra and interstate public
transportation. “There has been huge migration of labour in the last few weeks and with limited intra and interstate public transport available, they may find it difficult to return to the work sites which could cause further delays, we are looking for the government to respond allowing our labour to safely to return to work,” he said.
All the under-construction renewable energy projects are likely to receive due extensions on the grounds of national lockdown of about one-and-a-half months – March 25 2020 to May 3 2020 and remobilisation of labour, according to Amod Khanorkar, senior director at ratings agency Care Ratings, .
The ministry of new and renewable energy has already announced an informal clarification mentioning the duration of the lockdown and the time required to remobilise the workforce should be taken into consideration while granting the extension.
The supply and labour disruptions from the current lockdown could delay project execution in financial year 2020-21 till the time migrant labourers resume work, Care Ratings said in a recent report. It, however, added that though the spread of coronavirus has impacted the availability of workforce, limited O&M staff is allowed to work on specific permissions.
Khanorkar said that for operational projects, labour intensity is low but for under-implementation projects it is high, as they require usage of unskilled labour to a large extent.
According to Manish Gupta, senior director, Crisil Ratings, for under-construction solar projects technical requirements are high at an advanced stage hence, labour intensity is lower. “In case of operational projects, both technical and local manpower is required and as most of the utility-scale projects are in hinterlands where local labour is used so mobility issues will not impact much,” Gupta said.
But, if we compare the impact of the migration challenge between the wind and solar sector, the impact would be less on wind, according to sector analysts. “The impact would be less because, one, the number of projects under construction in solar is higher than wind and, two, the relative intensity of EPC work is lower in wind,” said Gupta. According to Khanorkar, wind power generation during March and April as it is very low so lower O&M would have a very marginal impact.
India’s renewable energy target of 175 GW by 2022 had the potential to create employment for over 330,000 workers in the wind and solar sectors – at least 230,000 additional workers between 2019 and 2022, according to a report by the Council on Energy, Environment and Water, the Natural Resources Defense Council, and the Skill Council for Green Jobs released last year.
Rapid capacity addition in India’s solar and wind sectors have been the primary drivers behind the growth. It added that in 2019, nearly 100,000 workers were employed in the solar and wind industry.
While it is difficult to predict the overall impact of labour migration on renewable energy jobs, Gupta said that looking at the current situation, job creation would continue to happen in the renewable sector.
“The tendering activity for renewable capacities has continued unabated and since January this year, the amount of capacity that has been tendered out is the same as that last year. So, there is a good pace of awarding activities that is happening and this COVID-19 issue is short term. At this point, I think job creation will continue to happen in the renewable sector,” Gupta added.
He said in order to tackle this issue on a short-term basis, the government should defer the commissioning dates for completion of under-construction projects as they have defined timelines given by their project authorities.
Concerns have also been flagged by the emerging start-ups in the electric vehicle (EV) industry. Talking to ETEnergyworld, Nishchal Chaudhary, founder and CEO of Jaipur-based EV start-up BattRE said that the industry will have to grapple with multiple challenges to come back on track once the lockdown is over.
“Some of the key parts of the supply chain will be affected and it might take two to three months for it to stabilise after lockdown. In the case of many companies, the factory employees are migrants from other states, it is going to be challenging to reach the full production capacities, as many of the employees will choose not to resume work immediately after lockdown,” said Chaudhary.
According to the National Electricity Plan released in 2018, for the capacity addition of considered 1,76,140 megawatt (MW) including renewables of 1,17,756 MW and 48,261 MW of thermal power plants under construction in the period 2017-22, the additional manpower requirement shall be of the order of 253.76 thousands out of which 194.91 thousands will be technical and 58.85 thousands will be non-technical.