Do we need more coal to end energy poverty?

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Africa-Kenya-Rose-cooking-dinner

Cooking with bio-mass, Kenya

The climate threat from coal

The past week has seen a flurry of announcements about the future of coal in the run-up to the Paris climate talks.

Stopping support for coal is a priority since planned coal development would singlehandedly exhaust the world’s carbon budget, taking us beyond the 2°C ‘defence line’ against dangerous global warming.

Many organisations participating in the Paris talks advocate phasing out fossil fuels  altogether and switching to 100% renewable energy by 2050 at the latest to have a realistic chance of keeping well below 2°C. Let alone the  1.5°C threshold that Least Developed Countries (LDCs) and the Alliance of Small Island States (AOSIS) want.

Climate change – making it harder for people living in poverty

We know this energy shift is not just a climate protection but also a poverty issue – as highlighted in Pope Francis’ Encyclical Laudato Si’ On our Common Home. A changing climate is already exacerbating existing economic and social inequalities.

CAFOD research has highlighted that 44% of those most vulnerable to the impacts of disasters and a changing climate are already living in extreme poverty, while The Observer newspaper recently showed the human face behind the statistics by revisiting families with children born on the eve of the last Climate Summit in Copenhagen. Six years on, 4 families from communities in Brazil, Kenya, East Timor and Bangladesh, working with CAFOD partners, describe how the impacts of a changing climate are making it harder to lift themselves out of poverty, and their fears for the future.

 Consistent UK support for the sustainable energy shift

This is why CAFOD is already calling for the UK to ensure all its support for energy in developing countries is compatible with building climate resilient development and poverty reduction.  Recent analysis done for us by ODI shows that the UK support for energy is still betting on fossil fuels – 43% of UK support according to the most recent figures (2009-13) went to fossil fuels and only 19% to renewables. This needs to change.

UK and OECD action on coal

However, with Paris on the horizon, the UK government has made a welcome pledge to phase out coal plants by 2025 (coal currently accounts for 25% of the UK’s emissions) – though rather inconsistently at the same time, it announced a dash for gas.

OECD countries also agreed new rules for export finance that will cut funding to around 80% of planned coal projects. However, the deal leaves the door open to some plants and ignores coal mining. It also contains an exemption for investments on the grounds of combating energy poverty.

This loophole chimes with previous protests – mainly from the global coal industry and its government supporters – that phasing out coal will hurt the poorest households that lack access to modern energy.

Coal as the solution to energy poverty?

We know the warnings that stopping coal will harm the poorest don’t add up from the climate angle.  But what about coal as a solution to energy poverty?

CAFOD with Christian Aid and ODI, as development organisations working with Southern partners, thought we should take a closer look at the relationship between coal and poverty – starting with the claims that ongoing coal investment is needed to give poor communities access to modern energy.  To this end, we have developed some FAQs on coal and energy poverty.

 

Global-policy-map-energy-poverty-2012-CAFOD

 

Billions still live without access to modern energy – both electricity and clean and safe ways of cooking.  The importance of access to energy as a development issue has been recognised in the new Energy Sustainable Development Goal (SDG 7). CAFOD’s One Climate One World campaign supports its aim of ensuring universal access to affordable, reliable, sustainable and modern energy by 2030.

Our starting point is that closing this energy gap is not simply about supplying more energy. Rather, it is about ensuring that people can access the range of energy services they need to lift them out of poverty. People need services that are sufficiently affordable, reliable, of good quality and safe enough to be usable in the home and in the community for lighting and heating, cooking food and powering clinics, schools, farms and businesses.

Here are some key reasons why more investment in coal is unlikely to deliver these energy services. You can find more information in the FAQs.

  1. Very little coal development is planned in regions with high levels of energy poverty

Most current and planned construction of coal power plants will take place in areas where almost everyone already has access to electricity (see the Figure below which shows each region’s coal project pipeline (measured in gigawatts) and its population without electricity). China, which dominates the global coal project pipeline, has achieved nearly universal electricity access. Sub-Saharan Africa, which has the highest number of people without access to electricity, has very little coal development outside of a few Southern African nations.

Only India has both substantial coal development and a large population without access to electricity.  Even here, the International Energy Agency projects that 147 million people will remain without electricity in 2030 if current policies including support for coal are followed.

Figure 1

  1. The biggest gap in terms of energy poverty is access to modern cooking solutions, not electricity

Just over 1 billion people globally are without electricity. This compares to almost 3 billion people without modern (i.e. clean and efficient) methods of cooking, who instead use solid fuels like fuelwood and charcoal with terrible health impacts – particularly for women and girls who tend to do the cooking. Indoor air pollution from smoke is the biggest environmental killer – and ahead of malaria or HIV.

Generating and supplying electricity – whether using coal power or another source – has little impact in terms of providing modern cooking services. Few people in Africa and Asia use electricity for cooking. Electric stoves are expensive and many people prefer the taste of food cooked over an open flame. Most households that do not have affordable and safe methods of cooking today would gain access most cheaply through the diffusion of LPG stoves, biogas digesters, and advanced biomass cook stoves – not electricity.

  1. In terms of access to electricity, connecting people to electricity grids is not cheapest option for most poor households

About 87% of the households that lack electricity live in rural areas where the grid does not reach. Grid-based electricity distribution is expensive, especially relative to the plummeting costs of solar electricity. The most cost-effective way of giving access to almost 60% of people without electricity would be through off-grid and mini-grid electricity systems. It is estimated that connecting people to grids – which may or may not be powered by coal – are only cost-effective options for 41% of people that lack electricity.

  1. Electricity access is a problem of distribution, not generation

Regardless of whether a new power plant is fuelled by coal or another energy source, translating new power into poor households getting usable electricity services requires the right investments in transmission, distribution, grid connection and maintenance – along with the right tariff systems.

Often, these investments are not done with the needs of communities living in energy poverty in mind. There are several reasons for this. Firstly, the criteria used to select which communities will be connected to electricity grid (distance from the grid, population size, ability of households to afford connection costs and tariffs) tend to favour wealthier communities. Secondly, within communities that become electrified, wealthier homes are more capable of paying the connection charges. In Kenya, Rwanda, Tanzania, Burkina Faso, and the Central African Republic, connection fees are more than the average monthly income. As a result, even in villages that have had grid access for decades, it is common for a substantial portion of households, sometimes 1 in 4, to remain unconnected.

Given the slow connection rate of poor households who live in close proximity to electricity grids, it is unlikely that communities living in remote areas will get energy services just because new coal-fired power plants are set up. It is crucial to have policies that target energy access specifically, through the right mix of financing and the right enabling environment – but also paying attention to what services people really need and ensuring these are appropriate to their local context.

  1. Most coal development is for industry and wealthier grid-connected households

The expansion of coal power in developing countries will primarily serve industry and wealthier, already-connected households. It will not automatically lead to electricity for people living in energy poverty.

So it seems that the claims that coal is needed to combat energy poverty simply do not add up.

Watch this space for further FAQs in the run-up to Paris exploring the relationship of coal development to poverty reduction and economic development overall, and on the social and environmental impacts of coal

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