Nissan chooses Japan over UK to build new X-Trail car

Unfortunately my detailed knowledge is a couple of decades out of date, but my reading of it is....

The grid (and hence end consumers because the prices are just passed on through) are obliged to buy a certain minimum proportion of renewable energy. It works like a market in a market.

Without ROC (and discounting long term relationships for both renewables and non-renewables where the price is set far in advance), the idea is that generators bid every half hour for what they want to charge for each of their generating units. The grid matches that to demand and pays everyone the highest marginal price so:

Gen A offers 10GW capacity for free (as a way to ensure that baseload is used)
Gen B offers 5 GW @ £10 per GW (prices are for illustrative purposes only )
Gen C offers 10 GW @ £20 per GW
Gen D offers 5 GW @ £30 per GW

In the first half hour demand is 17GW so the price paid to Gen A, Gen B and Gen C is £20 per GW for 10, 5 and 2 GW
In the second half hour demand is 14GW so the price paid to Gen A and Gen B is £10 per GW for 10 and 4 GW

Under ROC they're buying from two pools, renewable and non-renewable

 

Those constraint payments seem to be largely offset by reduced subsidy so the net cost to the customer is significantly lower.

 

A mate has one. He used to be the MD of a large engineering company and is into that sort of thing. He has a pretty decent sized domestic turbine (tiny compared to the full-commercial sized ones). The economics of running it are quite marginal and he has had his for long enough that he attracted and attracts the highest level of subsidy.

 

That takes me back the best part of three decades. I would say happy memories but to be honest they're rather hazy

 

but you're missing my point which is that we....the tax payer are paying way over the odds to wind managers to constrain generation (which you started by saying was not true) so that they can actually earn more to not produce than to produce. You say the cost is marginal? How does that work when they increase in size and number; that figure becomes somewhat more significant?
Nah, to me this whole green energy bollocks is just a scam paid for by mugs like us....the taxpayer... just like all this global warming crud its all just about money...people with their snouts in the money trough.

 

I'm not sure that's the cause. It's true that the constraint payments are higher than the subsidy payments that wind generators receive but I'm not sure that the constraint payments are higher than the total receipts that they would receive (subsidy + value of electricity).

If time permits I'll look into it a bit more today to try to understand whether this is a large-scale issue which materially affects the UK generation and supply mechanism or whether it's a high profile thing that happens comparatively infrequently but which grabs the headlines.

As the installed base of renewable generation has increased, the subsidy for new entrants has decreased. There will come a point in time where there is no need for subsidy (and hence constraint payments) for new entrants and whilst existing generators will have their payments "grandfathered in", they will be a decreasing proportion of the overall renewable mix.

A discussion about AGW would doubtless derail this thread once and for all (although I think we're already a long way from Nissan's manufacturing plans). It's interesting to note however that whilst renewables operators are just about breaking even, fossil fuel companies are making very health profits.

 

Regarding Constraint Payments....

I've had a few minutes to read around this. There are a lot of sources online but this one seemed to summarise the position reasonably well from a renewables perspective (though please note that the Renewable Energy Foundation is, according to many green campaigners, an anti renewables group).

https://www.ref.org.uk/energy-data/notes-on-wind-farm-constraint-payments

The first thing I learned is that Constraint Payments have nothing to do with renewable energy per-se, and are all about balancing both total supply/demand and load within individual regions of the grid. Constraint payments are made to all generators who are called upon to reduce their output, whether they are renewable or fossil fuel powered. There are many reasons why this might happen but typically it's some combination of:

• A sudden and unexpected drop in overall demand nationally
• A need to balance the load in part of the grid *

In the same way that generators are asked to bid to supply electricity, those same generators are asked to bid to reduce their output should the need arise. The grid then selects the preferred generator(s) based on cost and location (a gas-fired plant in the South of England may be the cheapest to switch off but if the load imbalance is in Northern Ireland, it won't help).

The vast majority of constraint payments are made to owners of gas-fired plants which makes a lot of sense because they generate the majority of the UK's electricity and the plant very flexible which means that it's comparatively cheap and easy to switch on and off.

There however seem to be a structural issue with regards to the UK's wind power capacity. Development of large scale wind farms, especially offshore ones, have largely been abandoned in England whereas it has continued in Scotland. Until and unless the grid is upgraded to reflect this imbalance, then there is an increased risk of local load imbalance. This is nothing new, fifty or sixty years ago the same issues were being faced when the "new" generation of coal fired stations were being commissioned.



* the national grid is pretty flexible and was designed so that generation can be concentrated in some areas (historically the big coal plants along the Trent and in Yorkshire) and demand in others (the big cities). There are however limits as to how much imbalance can be supported and so it can happen that supply is increased in one area as it's being decreased in another. If memory serves, Fawley near Southampton was very important for load balancing back in the day

 

....indeed that was a comment just between us girls..

how would that work based on the sporadic nature of wind and thus the sporadic availability of export potential. I don't understand? I can see that the business model is skewed in favour of offshore farms based on the ROCs (1.8 offshore as opposed to 0.8 onshore) so the incentive is to build offshore to obtain the higher subsidy but the capital cost of construction is mahoooosive!. Maybe the plan is to stop wind generation by stealth thus avoiding the issues constraint payments in future? But where does that leave the UK in relation to its green commitments...?? I don't know the whole thing seems half assed to me!

Anyway as you quite rightly say this has bollocks all to do with Nissan and their apparent failing business model.

 

The UK is a large island with windfarms installed all over and around it. As a consequence, the available electricity is less sporadic than might be assumed at first glance. For sure, without some, as yet uninvented and uninstalled, highly efficient storage system with immense capacity, wind power cannot provide baseload power, but it can provide a reliable 10-20% of UK power requirements.

It's like so many other government incentives. In the early stages, the costs are high and there's a lot of doubt and uncertainty so the incentives have to be high. Over time, economies of scale and advances in technology bring the costs down and the business model becomes increasingly robust and so the incentives and subsidies reduce.

In the case of the UK's green commitments, as the installed wind generation capacity approaches, and indeed exceeds, government targets, then incentive payments will reduce and indeed cease. After than point, any further wind farms will have to stand on their own feet commercially and the UK will have met its commitments.

There are IMO big outstanding questions of how to provide baseload (nuclear would appear to be the answer but as cerberus' comments show, there's a lot of opposition to it) and also how to provide flexible generation to plug gaps in demand. I suppose we're looking at a future of multi-modal generation.

Regarding Nissan, I guess time will tell. I fear for the Sunderland plant's long term future post Brexit, when it would appear to serve no strategic purpose. Nissan will likely soldier on but will concentrate its manufacturing back in Japan and in its major markets.

 

Question: How do you get rich beyond your wildest dreams?

Answer: Do what the wind power and fracking outfits have done, and the British government will thrust so much lucre at you in the shape of subsidies and research funding that you'll be sick of the effing sight of it.

 

I guess you could say that for most current manufacturers producing diesel powered cars!

 

...as we are now only without the absurd subsidies to the green brigade who are snaffling their snouts into the tax payers pocket!

 

To be honest, it's quite easy to switch from diesel to petrol, less easy but still possible to switch to electric from diesel.

The issue for the Nissan plant in Sunderland is that, regardless of what it manufactures, it seems to have no strategic purpose in the post-Brexit world. If there is frictionless, tariff free trade with the EU and other markets (as now) then it makes all the sense in the world. If the UK was a huge Nissan market where production was largely for domestic consumption then that too would make sense. Japan has just signed a trade deal with the EU which makes importing cars from Japan far cheaper so it makes sense to manufacture there, or in the EU, for the EU market. It makes no sense to manufacture in the UK unless the other cost savings more than offset the additional costs of tariffs and/or supply chain disruption.

 

With pollution from fossil fuels at least there are only localised pockets of health-threatening conditions, whereas in a meltdown situation of a nuke power station the consequences are over vast areas owing to wind-drift, and will affect millions of humans and animals, together with agricultural land, and for years to come. When it's properly and logically analyzed, electric cars are not the way to go.

 

To be fair, all generators are being amply rewarded for providing generating capacity, the payments to green generators are dwarfed by the payments to the gas generators and nuclear generators.

The original intention was that all kinds of generators would by vying for our business and so there would be a comfortable capacity buffer as new entrants built new plant. For a variety of reasons that simply didn't happen:

• You can't just build a new power station or wind farm anywhere you want - sites are very limited
• As new, more efficient plants came on stream, older less efficient plants were retired - there was actually a net decrease in capacity
• Generators realised that capacity constraints led to higher energy prices on the open market, it's in their interest to have them
• Nuclear energy was supposed to form the baseload backbone but as commercial generators have to bear the open-ended decommissioning costs, the cost/benefit equation is skewed - indeed IMO it can be argued that only governments can underwrite this expense

For a centrally owned and operated national generator, planning and building sufficient capacity is not an issue, especially if there aren't commercial pressures to keep the system as lean as possible. The risk is that you end up with over-capacity, over-cosseted equipment and very expensive electricity.

 

The pollutant effects of fossil fuels already affect tens or hundred millions of people every single day - including the effects of radiation resulting from burning those fossil fuels. Hundreds of thousands, or even millions of people die every year as a result of those pollutant effects.

For sure there are considerable risks associated with generating electrical power through nuclear fission but in the more than fifty years that it's been a commercial proposition, the number of people affected are orders of magnitude lower.

 

Yes, well in a year or two's time somebody might come up with the ingenious idea of how to distil diesel exhaust which can eliminate particulates. Or even a revolutionary method of eliminating them altogether by means of an advanced catalytic converter - who knows what's around the corner. Oh, and I doubt very much if that 'somebody' will be a cosmologist? In the meanwhile contracts might already have been signed at vast expense to begin building newkuler generation stations which won't be needed. It isn't a perfect nor is it a risk-free world. If you reply to this please don't include a link?

 

I suppose it is possible - then again very clever people have been doing exactly that which is where the DPF technology (a particular bête noire of Honest John of the Telegraph) came from - but that's just the tip of the iceberg as concerns the health impacts of fossil fuels.

As regards nuclear power. I think that new nuclear power stations are absolutely needed if we're going to make best use of the fossil fuels we have and address the health impacts of burning those fossil fuels. My personal view is that the potentially open ended costs of decommissioning nuclear power stations mitigate against the idea of private ownership and operation, at least in the UK. The need for plant owner/operators to be indemnified against risk of these costs and make a profit on those indemnities means that the consumer ends up being locked into very long term, very expensive, electricity supply contracts whilst still being on the hook decades down the line if the decommissioning costs are much higher than forecast. I think that this, like PFI, is an incredibly inefficient way of funding "off book" government spending.

Regarding risk, as I've already mentioned in this thread, humans are really bad at assessing and judging risk. Existing risks (in this example the high risk of health impacts due to fossil fuels) are discounted and newer risks (in this example nuclear power) are discounted. It's the same as the screaming headlines about some new designer drug when a single young person tragically dies which gloss over the fact that tens or hundreds of thousands die annually from the effects of alcohol and smoking.

The reason I include links in my posts is in order to provide some kind of backup to my claims. Without that, all we have is argument by assertion - which is pointless IMO.

 

Well you sure aren't one for using a hundred words when a thousand will do? My comment about your links was to do with the time I wasn't prepared to expend by having to check them all for veracity and impartiality. And the reason I don't want to engage with you is because of your prolixity and goalpost moving: this is a messageboard, for concise observations and discussion, not for proffering theses??

 

Yes, we realise that you prefer to ignore information that challenges your very narrow worldview.

I'd like you to provide evidence for that allegation of goalpost moving. It's something I try not to do.

I'll go through the rules of the board but I'm not aware of there being a prohibition on supporting one's argument with objective evidence.

 

Soz but I'm not gonna trawl back through six months of your posts looking for examples of it - I don't have the time? Nor the inclination?? Let's just say it was nice while it lasted - sort of! Right now, where was I in my very narrow worldview?

 

so in summary then....and putting aside the obvious issues...its a simple case that green tech has been actively encouraged despite its obvious draw backs. Like Nissan (where we began) we are sold a sound bite; Nissan is not investing in the UK because of Brexit. Then we discussed the moveable feast of "facts" and how they are not as "facty" as they seem. Green power has a place...I guess...but its utility is marginal in terms of its ability to sustain modern economies. Nissan and the Entrail..or whatever its' called... is likewise a marginal proposition based on the estimations of future market expectations and consumer demand....ergo sound bits and facts are a moveable feast and dependent upon which source they come from. Green tech is foisted upon us by Government thus we have a boisterous set of people all telling us just how great it is and scooping up rather large amounts of tax payers money. Nissan, however, operates in the open market (shuuuush...lets' forget about French government subsidies for the moment)...and are dependent upon demand for their product wherein market forces prevail...demand for the Entrail, it seems, is not as ooh jar cum spliff as they thought thus they ain't going to build so many thus they don't need a bunch more Geordies tooled up and panting to build them....thus they chuck in a sound bite about Brexit which we are all just oh so happy to suck up as being...well a fact.....but really facts = soundbites!

 

I'm afraid the drawbacks are not immediately apparent to me - or more accurately that the benefits: providing a catalyst to an industry which can help to reduce the UK's dependence on fossil fuels, meet our greenhouse gas emission targets, and deliver cheap, clean electricity.

Yes it's a soundbite, but the fact still remains that the UK isn't getting the investment for non-diesel vehicle either.

I suppose it depends on what you mean by "sustain".

All over the world, countries are increasing the proportion of electricity that they are getting from renewable sources, wind, solar, hydro, geothermal and so on. Unless we find a way to store huge amounts of energy efficiently and cost-effectively then wind and solar cannot be the exclusive electricity generation sources - but then again I'm not sure that anyone is suggesting that they are.

At the moment, wind provides 10%-20% of the UK's electricity requirements. For Denmark this is 30% - 50% which seems to indicate that wind can be a significant contributor to the overall electricity mix.

It's the XTrail. It's a medium-sized SUV which is exactly what the market seems to want these days. The diesel variants may or may not be popular but there are still petrol and electric versions and these are being manufactured in Japan.

The purpose of the the subsidy is to promote green technology to reduce carbon emissions.

The fact still remains that Nissan could have chosen to build the new XTrail in the UK, but the UK's departure from the EU was a significant (but not sole) factor in the decision not to.

 

maybe........but then again maybe its to fulfil an absurd political agreement foisted upon the world by people like Mann and co...anyway as you say its all a load of all smoke and mirrors.

Then I guess their Entrails aren't that good since Nissan admits people don't want theirs...?

peachy while its windy. When ts not they're just an eyesore and you have to have sommat else...which you have to have any way in order to sustain a modern economy so why spend so much money on something which you can't rely on....YAY NUCLEAR....nukes goooood!

 

there you go with that "FACT" thing again.... I thought we'd put that wee rascal to bed...!!