Story: Energy supply and use

Page 7. Coal and coal gas

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Coal energy

Coal reserves provided much of New Zealand’s energy in the 19th and early 20th centuries. Coal gas lit streets, homes and workplaces, and both coal and coal gas provided domestic heating and cooking. The power for industrial and manufacturing machinery came from coal and coal gas, and generators were run on them when electricity was introduced. Coal also powered trains and coastal shipping.

Coal supplied 45% of energy in the 1940s, but by the early 1970s it supplied less than 20%. The move away from coal was driven by cost and convenience. In 1950 the government stopped subsidising the price of mined coal. The following year, industrial unrest resulted in an uncertain supply. As coal prices rose, rail transport switched to diesel, and the use of road transport increased.

Many households switched to electricity because coal is a dirty fuel, and coal gas smells. Regardless of how electricity was generated it remained subsidised – so for users it was cheaper as well as cleaner.


Over the 20th century, use of coal bounced between 50 and 75 petajoules a year. (A petajoule is equivalent to the energy provided by around 28 million litres of regular unleaded petrol.) In 1924, 75 petajoules were used; in 1988, 58 petajoules; and in 2007, 69 petajoules.

Coal use in 2007 was 3.1 million tonnes. Consumption was through:

  • power generation and industrial use – 65%
  • other uses – 26%
  • commercial use – 6%
  • agricultural, transport and residential use – 3%.

The two biggest users were the Huntly power station, which used up to 2.5 million tonnes a year, and the Glenbrook steel mill, which used 800,000 tonnes a year. Coal consumption is strongly related to the supply of electricity. Thermal power stations, running on coal or gas, back up hydro generation.


In the 19th century coal was mined then transported by rail and coastal shipping. It was taken to homes and businesses by horse and cart. Some rail and shipping companies which were big users of coal owned coal mines.

Coal gas

Coal was converted into a gas used for lighting, heating and cooking. Known as ‘coal gas’ or ‘town gas’, it was widely used in England and Europe, so it was a familiar fuel to many settlers. In New Zealand it was provided by local authorities and private companies from the 1860s on. By 1916 there were gasworks in 56 cities and towns.

Gaslight blackguard


In the 19th century, Dunedin’s coal gas provoked argument and even fighting. The elaborate lamp posts used for street lighting were ridiculed. Residential users objected to the cost of the gas, and the quality and pressure were defective. Municipal or private ownership of the gasworks was an election issue, and the subject of a referendum. A gas company associate threatened a councillor with a thrashing, telling him he was a ‘damned low blackguard’1, and a court case resulted. Argument over coal gas led to a wild brawl in the council chamber.


Distribution of coal gas

Coal gas needed a reliable supply of good-quality bituminous coal. Coal was sourced locally and from Australia. Gas was stored in ‘gasometers’. These large, circular storage tanks could telescope up and down depending on how full they were. From the gasometer, gas was transmitted through underground pipes. Trained gas engineers and fitters were required to lay them.

Reticulating for gas (laying out the pipe system) was expensive, and many areas were never supplied.

The end of coal gas

Although coal gas continued to be supplied until the 1970s, users preferred electricity. By 1920 electricity had taken over street lighting. Municipal gas departments fought a losing battle to persuade housewives to continue to use gas rather than electric stoves from the 1920s.

By the end of the Second World War the decline in the residential use of coal was irreversible. Residential use was maintained only because the government was facing a serious shortage of electricity, and could not supply those still using coal gas. By the early 1960s electricity supply had increased, and coal-gas use declined. It was eventually replaced by natural gas.

  1. Quoted in K. C. McDonald, City of Dunedin: a century of civic enterprise. Dunedin: Dunedin City Corporation, 1965, p. 124. Back
How to cite this page:

Megan Cook, 'Energy supply and use - Coal and coal gas', Te Ara - the Encyclopedia of New Zealand, (accessed 21 July 2024)

Story by Megan Cook, published 11 Mar 2010