Myth 3: Coal And Energy Poverty


In a desperate struggle for survival and relevance in a rapidly changing world, the coal industry has resorted to a public relations campaign claiming that coal is needed to alleviate energy poverty in the Global South. But this is nothing more than a shameless plot by the industry to keep itself alive.

Coal is clearly not the way to deliver modern energy services to those who lack them. According to the International Energy Agency (IEA), almost 85% of the 1.3 billion people without access to electricity are in rural areas. Without massive investment in poles and wires, boosting coal-fired generation capacity will do little for rural and remote communities.  The IEA says that mini-grids or off-grid solutions will the best way of bringing modern energy services to 70% of the people who currently lack them, and 90% of that electricity must be provided by renewables. Coal plants will simply not reach the vast majority of people without access to electricity.

In India, when a village is more than 5km from the grid, the cost of supplying electricity from decentralised renewable sources is far below the costs of supplying from conventional sources when grid transmission infrastructure is taken into account. Thermal coal generation capacity doubled in India between 2002 and 2013, yet the number of rural households connected to the grid increased by only 6.4% during the same period. In other words, large coal power plants are being built to supply power not to those without it, but to industry and the middle classes. Very often, communities that live closest to power plants are kept in the dark.

Studies show that off-grid decentralised renewable energy systems can deliver household energy services faster and more cheaply than coal and other centralised generation sources, and without harming health or sacrificing clean air and water. In Kenya, to connect to the grid can cost one household between $900 and $4000. For just $900, this same household could purchase a home solar system capable of powering lights, computers, fans, charging cell-phones and a small refrigerator – without the monthly bills and reliability issues of the grid.

Despite the coal industry’s rhetoric on energy poverty, The Australia Institute has found that what the industry says and what it does about energy poverty are very different. Peabody Energy, the leader of the campaign to brand coal as “Advanced Energy for Life”, does not donate money, staff time, expertise or discounted fuel to any project that directly alleviates energy poverty. Peabody’s only contribution to energy poverty is maintaining a website and social media page which promotes coal as the solution to the problem, and whose purported 500,000 followers have mostly been bought.

More revealingly, while coal companies are not, in general, major contributors to energy poverty alleviation efforts, when they do contribute, it is with support for energy sources other than coal.

The coal industry also argues that increasing the use of coal-fired power will improve health outcomes in developing countries, including by reducing air pollution from wood fires. Yet coal-fired power is a major contributor to poor air quality, killing hundreds of thousands of people per year and affecting the health of millions more. Add into this the 6 degrees of global warming that would be caused by the coal industry’s rapid expansion, and the health impacts on billions of people would be truly staggering.

 Key resources on coal and energy poverty: