1 Design of a Positive Feedback Investment Cycle to Achieve a Lunar Habitat: ROI Calculator for Capability SteppingStones Final Report GMU SEOR SYST 495 Submitted: April 23, 2012 Submitted to: Dr. Lance Sherry Submitted by: Daniel Hettema Scott Neal Anh Quach Robert Taylor Sponsored By:
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1
Design of a Positive Feedback Investment Cycle to Achieve a
Lunar Habitat: ROI Calculator for Capability
Stepping-‐Stones
Final Report GMU SEOR SYST 495
Submitted: April 23, 2012 Submitted to: Dr. Lance Sherry Submitted by: Daniel Hettema Scott Neal Anh Quach Robert Taylor
Sponsored By:
2
Table of Contents Table of Tables ............................................................................................................. 4
Table of Figures ............................................................................................................ 5
Context ........................................................................................................................ 9 Introduction .................................................................................................................................................................. 9 Benefits of Space ........................................................................................................................................................ 9 Past and Current Investment ................................................................................................................................ 9 Potential Outcomes ................................................................................................................................................. 11 Obstacles ...................................................................................................................................................................... 12
Industry Limitations .............................................................................................................................................. 12 Capital Investment .................................................................................................................................................. 12 Debris ............................................................................................................................................................................ 12 Launch Costs .............................................................................................................................................................. 14
Need & Problem Statements ...................................................................................... 27 Need .............................................................................................................................................................................. 27 Problem ....................................................................................................................................................................... 27
However, the only stakeholder providing any funding to debris collection
currently is government, and their funding is only exploratory and insufficient.
Because of this, debris collection does not take place, and the conditions of LEO
continue to decline. This creates a tension illustrated in the debris collection cycle,
seen in Fig. 5.
21
Figure 5: Debris Collection Tension Cycle
To reiterate: because there is no debris collection, debris continues to
increase through debris colliding with itself, and new accidents occurring. This
increase in debris increases the probability of a debris collision, which in turn
increases orbital insurance costs. Finally, because this insurance cost continues to
raise, activity in LEO will remain low, resulting in reduced incentive to undertake a
debris collection endeavor.
LEO Habitat Bootstrap Funding
The second reality is a lack of bootstrap funding for Space Habitats. This
reality is depicted in Fig. 6.
22
Figure 6: Reality #2: Lack of Bootstrap Funding for Space Habitats
While High-‐Altitude/Space Tourism, Government, and private industry can
all benefit from Space Habitats, no funding is provided to Space Habitats to ensure
their success. The relationship between Space Habitats and Launch services is
particularly important. Depicted in Fig. 7, the third reality is the high cost of launch
services. Because Space Habitats lack bootstrap funding, their development is
hindered, and their demand for launches by Launch Services is encumbered. Low
launch frequency and inconsistent demand are contributing factors that keep launch
costs from improving.
23
Figure 7: Reality #3: High Cost of Launch Services
Stakeholder Objectives/Issues Chart
Table 1 shows a summary of the objectives and issues facing the identified
stakeholders. They have been broken down into private industry companies looking
to develop space, and investors, represented by Government and Earth’s Population.
High-‐Altitude Tourism’s goal is to foster an interest in space, and the problem they
face is the feasibility of sustaining ships that repeatedly re-‐enter the Earth’s
atmosphere. Satellite Companies seek lower orbital costs and increased lifetimes of
satellites, a direct benefit of debris collection. Issues facing Satellite Companies
sprout from this lack of debris collection as well as launch costs. Next, Space
Tourism, which has been separated from High-‐Altitude Tourism due to a difference
in objectives and issues, seeks sustainable space-‐based tourism. Space Tourism
faces a technology gap brought on by prohibitive launch costs and the current
24
availability of space habitats. Lastly, issues concerning Government and Earth’s
Population pertain to other short-‐term concerns unrelated to space such as the state
of the economy, and war.
Table 1: Stakeholder objectives/issues chart
Disinvestment Cycle
From the analysis of identified stakeholders, an illustration, seen in Fig. 8, of
the current environment surrounding identified space markets was created.
25
Figure 8: Disinvestment Cycle
This disinvestment cycle is a summation of negative loops affecting each
space market. Beginning at the top right, a negative cycle is created following the
loop from investment through space tourism, launch costs, and space activity.
Indicated by the red negative cycle symbol, this negative loop shows that a lack of
investment leads to a decrease in space tourism, which in turn negatively impacts
launch costs, which leads to a lower amount of activity in space. The next loop, the
debris collection loop, begins at investment and goes through debris collection,
amount of debris, orbital insurance, and back to investment. This cycle is essentially
the same cycle depicted from the second stakeholder reality mentioned earlier.
Amount of debris and orbital insurance both negatively impact space tourism and
space habitats as well. Lastly is the space habitat loop: from investment to space
habitats to launch frequency to launch costs to space activity and back to
Space Activity
investment
amount of debris
orbital insurance
space habitats
launch costs
Debris collection
launch frequency
space tourism
_
_
_
_
_
26
investment. A lack of investment leads to a decrease in space habitats, which
negatively impacts launch frequency, and therefore launch costs, which in turn
lowers the amount of activity in space. The development of space markets requires
the reversal of a number of these negative loops.
27
Need & Problem Statements
Need
There is a need to break the dis-‐investment cycle, by focusing on reducing
launch costs, and insurance premiums, that will lead to a profitable development of
space.
Problem
Evaluate the costs and revenues of space markets to develop synergy in
investments of capabilities that will break the dis-‐investment cycle.
28
Proposed Solution: Capability Stepping-‐Stones
Project Boundary
Due to the complexity of establishing a lunar habitat, this goal was broken
down into achievable stepping-‐stones that lead to a lunar habitat. These stepping-‐
stones focus on existing solutions to address the capabilities of launch, debris
collection, low Earth orbit (LEO) habitats, and lunar habitats.
Single-‐String Design
After conducting research concerning the environment surrounding a
potential space market, a sequence of capability stepping-‐stones was developed.
These stepping-‐stones focus on combining the necessary capabilities of an industry
or industries to overcome the hurdles of launch cost, debris, and investment under
critical mass while providing that industry or industries the specified ROI. Each
stepping-‐stone requires the previous stepping-‐stone to be established before the
next stepping-‐stone could be enacted. These stepping-‐stones include high-‐altitude
tourism, debris collection, LEO habitats, and LEO hub and Moon base, leading
ultimately to a permanent lunar habitat.
29
Capability Stepping-‐Stones
High-‐Altitude Tourism
Based around Virgin Galactic mission plan, these high-‐altitude tourism trips
focus on bringing in the initial round of investments to space companies. This
investment spurs the construction of various spaceports, and pushes other
industries to recognize future profit from investing in space markets. This stepping-‐
stone also serves as a catalyst for fostering an interest in space in the general public.
This excitement to go into space is key to make the following stepping-‐stones
achievable.
Debris Collection
The potential of a catastrophic collision from space debris continues to grow.
Progress into space will become increasingly encumbered by insurance costs should
debris collection fail to take place. Logically, before LEO can become habitable, the
majority of space debris in LEO needs to be removed. This debris has the potential
to be returned to Earth for reselling or recycling depending on the value of the
debris. By removing large amounts of the debris that is orbiting in LEO, the
insurance factor for both assets and humans would be reduced during LEO
habitation.
LEO Habitation
With the two previous stepping-‐stones complete, LEO human habitation
becomes possible. Now there would be an interest in space from both the public and
also governments, most of the necessary ground framework would have been
30
established, and the risk of catastrophic orbital collisions reduced. Based on
Bigelow Aerospace’s mission plan, this presence in space allows for both scientific
research as well as short-‐term space vacations for the public. As the amount of LEO
habitats increases, the cost for launching reduces, thus making it more accessible to
a larger portion of the public. As the number of LEO habitats increases, our ability
to sustain life at LEO is developed.
LEO Hub and Moon Base
One of the advantages of the LEO habitats utilized in the previous stepping-‐
stone is the modularity of the habitats. Bigelow Aerospace BA-‐330s can be
connected together, so the concept of creating a space station or hub from piecing
together these habitats is logical. This space station will become the platform for
further exploration into space. By utilizing a LEO space station, a space-‐exclusive
travel vehicle would be capable of quickly and efficiently move through space to a
similarly constructed lunar base. The purpose of space-‐exclusive ships is to mitigate
the frequency of reentry into the atmosphere which can damage ships, and to utilize
alternative fuels that do not require fuel to be launched from Earth. This lunar base
sets the groundwork for a permanent lunar habitat.
Revenue is obtained through tickets to both the LEO hub and the lunar base.
Traditional launch vehicles would be used to get tourists to the LEO hub. From
there, the space-‐exclusive travel vehicles would taxi Moon-‐bound tourists.
Permanent Lunar Habitat
The expansion of the lunar habitat to a permanent status requires utilizing
the materials available on the Moon. While certain components, such as nitrogen
31
with a 100 ppm abundance per ton of lunar regolith, still need to be sent from Earth,
basic materials necessary for sustaining life, such as water and oxygen, can be
harvested from lunar regolith. This permanent lunar habitat represents the goal of
the project, and seeks to utilize mining and manufacturing to establish a permanent
presence on the Moon, and create a platform delving deeper into space and
capturing and utilizing resources of other celestial bodies.
Building Blocks
A building block diagram, Fig. 9, was developed to summarize the purpose of
each capability stepping-‐stone and to show how each stepping-‐stone builds off the
previous stepping-‐stone. High-‐Altitude/Space Tourism serves as the catalyst to
incite the interest, and therefore the investment, of the Earth’s population into
space. To elaborate, the success of Virgin Galactic will garner an interest in space
and encourage seed funding for this and subsequent stepping-‐stones. Part of this
funding would be fed into debris collection to reverse the declining trend of low
Earth orbit conditions.
32
Figure 9: Building Block Diagram
With LEO cleaned, LEO habitats can be launched into orbit. By establishing a
location in space that must be maintained, the foundation of a LEO infrastructure is
established. This infrastructure involves the launching of habitats, personnel, and
commodities to LEO, as well as decommissioning habitats and bringing personnel
down safely. This creates a consistent demand for launch services that will bring
down the launch cost index simply by reducing overhead and taking advantages of
economies of scale. Moreover, LEO habitats provide an environment for
governments and the private sector to conduct research in space. This garners
interest from these investors to invest in LEO habitats.
The LEO hub and Moon Base stepping-‐stone extends this infrastructure
further into space to facilitate the extension of sustainability. This infrastructure has
33
also expanded to accommodate space tourism, and includes the addition of space-‐
exclusive ships travelling from the LEO hub to the Moon base.
Lastly, the permanent lunar base is self-‐sustainable through lunar mining
and manufacturing, and serves the foundation for delving further into space.
Oxygen, water, and nitrogen, basic commodities necessary to sustain life, can be
obtained through regolith processing.
Decision Support Tool (ROI Calculator)
These capability stepping-‐stones are combined together to create an ROI
calculator that evaluates the return on investment for industries involved. This ROI
calculator serves as a decision support tool that allows the user to vary inputs into
each stepping-‐stone and observe the effect of these changes on return on
investment. The tool also allows companies to identify minimum selling prices for
commodities to attain return on investment in a specified number of years.
34
Models Each stepping-‐stone model was constructed using SPEC Innovations
NimbusSE, a functional database and modeling tool. These models provide a view of
necessary functionality of each stepping-‐stone and allow complex interaction with
in the model to take place.
The construction of these models first started with creating input/output
(I/O) diagrams. After the top level I/O diagram was finished model equations were
developed to identify the key parameters that needed to be modeled. Then each
model was constructed in NimbusSE, where the necessary calculations were done
using back-‐end scripting provided by the tool. Finally, the assumptions and
limitations of the models were identified.
Top Level
Fig. 10 illustrates the I/O diagram for the top level model. The stepping-‐
stone capabilities and investment are the inputs, with an occasional input of Seed
Funding. ROI is output where part is returned back and used as investment for later
stepping-‐stones.
35
Figure 10: Top Level I/O
Stepping-‐Stone 1
The first stepping-‐stone is High-‐Altitude Tourism. This financial model is
based on and validated by Virgin Galactic’s financial model. The input/output
diagram for this stepping-‐stone is seen in Fig. 11.
Figure 11: Input/Output Diagram for High-‐Altitude Tourism
The equation for this stepping-‐stone is a simple ROI equation.
𝑅𝑂𝐼 = 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 − 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 / 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
ROIInvestment
Stepping StoneCapabilities
Seed Funding
Lunar Habitat ROI Calculator
36
Revenue is given by number of tickets sold, and investments are comprised
of the: cost of the ship, development costs, and maintenance costs. Assumption were
made that a high-‐altitude tourism ship could handle two flights before requiring
maintenance service, and that two flights occur per month, or 24 annually.
Stepping-‐Stone 2
High-‐Altitude Tourism with the addition of Debris collection, the second
stepping-‐stone, was designed to show the effect of debris collection on orbital
insurance rates for the previous stepping-‐stone. The input/output diagram for this
stepping-‐stone is seen in Fig. 12.
Figure 12: Input/Output Diagram for High-‐Altitude Tourism and Debris Collection
Stepping-‐stone 2 builds on high-‐altitude tourism thus the ROI equation is
carried over, as indicated in blue on the input/output diagram. In addition the ROI
equation, debris equation models the amount of debris collected over time is
included. Variable definitions are included in Table 1.
37
Table 2: Debris Collection Variables
Variable Meaning Xi Debris in orbit Xi+1 Debris in orbit after time step n Number of active debris collectors r Rate of collection e Efficiency of collection
The rate of collection (r) is identified as the pounds of debris collected over a
24-‐hour period. The efficiency of collection (e) acts as a difficulty factor for
collecting debris based on its abundance. While the amount of debris is large, debris
collection is simple. As the debris is collected, the value begins to drop also. As seen
in Fig. 13, the minimum efficiency was chosen to be .3 (notional), while the
maximum efficiency is 1.
Figure 13: Efficiency of Debris Collection Graph
38
The equation for this graph, is a logistic curve, shown below, that represents
a notional idea of debris collection efficiency.
For this model, the assumption is made that no collisions occur as a result of
the debris collectors. In addition, the debris collected is not salvaged. Debris
collection is a necessary step in the development of these space markets, and while
this collected debris could be salvaged for revenue, the focus of this stepping-‐stone
is simply to reduce insurance costs for other stepping stones. The objective of debris
collection was modeled such that a return on investment isn’t the goal.
This model was validated using Star Tech Inc.’s debris collection model,
which indicated it would take 6.7 years to remove all debris in orbit. The equation
used for this stepping-‐stone differs with the inclusion of the variable “d,” the rate of
increase of debris per time period.
Stepping-‐Stone 3
Stepping-‐stone 3, LEO habitats, is modeled from the perspective of Bigelow
Aerospace, which will be offering leases for LEO habitats in the coming years. This
serves as the basis and validation of the model. The input/output diagram for
stepping-‐stone 3 can be seen in Fig. 14.
39
Figure 14: Input/Output Diagram for LEO Habitats
The profit equation does not include the cost for the renter to launch to the
habitat, but does include the maintenance cost to send a specialist to fix any issues
with the habitat; variable definitions are in Table 3.
𝑃𝑟𝑜𝑓𝑖𝑡 = 𝑃 ∗ 𝑛 − [𝐶!𝑛 + 𝐶!"!!
!"#$!+ !
!𝐶!"
!!!"#$!
]
Table 3: LEO Habitat Variables
Variable Meaning P Habitat lease price Ch Cost of habitat CLH Cost to launch
habitat CLP Cost to launch
person to habitat CMN Maintenance cost Lh Lifetime of habitat MTBFH Habitat failure rate n Number of habitats
Habitats were assumed to require repair four times throughout their
operational lifecycle. Also, habitats are assumed to be full, and trips to the habitats
are assumed to be full capacity.
40
Launch Costs
For this and the subsequent stepping-‐stones, a launch cost reduction curve,
seen in Fig. 15, was developed to attempt to quantify the effect of launch frequency
on launch cost. Through reduction of overhead and taking advantage of economies
of scale, the same rocket technology can produce different launch costs indices
purely based on frequency of launch. Data was not available to properly quantify
this idea, so the graph remains notional.
Figure 15: Launch Cost Reduction
Stepping-‐Stone 4
Stepping-‐stone 4, LEO hub and Moon Base, models tourism from Earth to the
hub, and from the hub to the Moon base. As previously mentioned, the hub and
41
Moon base can be comprised of habitats from the previous stepping-‐stone. An
input/output diagram for stepping-‐stone 4 is depicted in Fig. 16.
Figure 16: Input/Output Diagram for LEO Hub and Moon Base
The assets associated with this stepping-‐stone are the LEO hub, the Moon
base, ships taking tourists from the Earth to the Hub, and space exclusive ships
taking tourists from the hub to the Moon base. The cost, launch cost, and
maintenance cost of these assets, therefore, comprise the investment portion of this
profit equation. The revenue generated from this stepping-‐stone the sum of the
tickets to the Hub, and tickets to the Moon base. The equation and Table 4 show the
equation and explanation of variables for this stepping-‐stone.
Table 4: LEO Hub & Moon Base Variables
Variable Meaning Th Ticket to LEO hub Pth Price of Ticket to LEO hub TM Ticket to Moon base PTM Price of Ticket to Moon base CH Cost of LEO hub CMB Cost of Moon base LMB Lifetime of Moon base
42
MTBFMB Moon Base Failure Rate CM,MB Average Cost to fix Moon base LH Lifetime of LEO hub MTBFH Moon Base Failure Rate CM,H Average Cost to fix LEO hub CL,H Cost to Launch LEO hub CL,MB Cost to Launch Moon base x Number of Earth-‐LEO hub ships y Number of LEO hub-‐Moon base ships Cx Cost of Earth-‐LEO hub ship Cy Cost of LEO hub-‐Moon base ship Capx Capacity of Earth-‐LEO hub ship Capy Capacity of LEO hub-‐Moon base ship CLX Launch Cost for Earth-‐LEO hub ship CLY Launch Cost for LEO hub-‐Moon base ship Lx Lifetime of Earth-‐LEO hub ship MTBFx Earth-‐LEO hub ship failure rate CM,x Average Cost to fix Earth-‐LEO hub ship Ly Lifetime of Earth-‐LEO hub ship MTBFy LEO hub-‐Moon base ship failure rate CM,y Average Cost to fix LEO hub-‐Moon base ship
An assumption for this model is the travel time from the Hub to the Moon
base is less than 72 hours using the space exclusive ships. Apollo 11 took 76 hours
from Earth, so this is feasible. Also, a capacity of 10 passengers for both types of
ships was chosen.
Stepping-‐Stone 5
Permanent Lunar Habitation, stepping-‐stone 5, models the sustainability of a
permanent lunar habitat. This sustainability is obtained through lunar mining and
manufacturing. The input/output diagram for this model is depicted in Fig. 17.
43
Figure 17: Input/Output Diagram for Permanent Lunar Habitat
To clarify, initial investment for this model includes the cost of the Moon
habitat, which could perhaps utilize one or more habitats from the previous
stepping-‐stones, as well as mining and manufacturing equipment necessary to
gather and process regolith. The equation and explanation of variables can be found
in equation and Table 5 respectively.
𝑃𝑟𝑜𝑓𝑖𝑡 = (𝑅 ∗ 𝑛)!"#
− 𝐶!!! − (𝐶! + 𝐶! + 𝐶! ∗ 𝑃 ∗ 𝑇)!"#
Table 5: Permanent Lunar Habitat Variables
Variable Meaning R Average Regolith Payload n Number of Payloads CB+E Cost of Base & Equipment Co Operating Costs/year Cm Maintenance Costs/year Ct Travel Cost on Moon/lb P Average Payload T Number of Trips/year
Assumptions for this model include the limitation of mining to the Moon, that
water, oxygen, and nitrogen are harvested through regolith processing.
44
Results
Overall
The overall results for the simulations of each stepping-‐stone are shown in
Table: 6. These values were calculated based on inputs that were gathered from a
combination of reports and documentations that were gathered. When data for a
specific required input value was not available, a best guess was made based on
common values and sponsor input. ROI calculations were then performed based on
output data from the models.
Table 6: Overall Results
These results show that as each stepping-‐stone reaches the investment
critical mass, they reverse the trends present in the disinvestment cycle, thus
creating an investment cycle, seen in Fig. 18. This investment leads to an increase in
space tourism, which in turn increases the level of space activity thus encouraging
45
investment. As investment continues to grow, debris collection starts, and the
savings in orbital insurance rates increase space tourism which leads to increased
investment. Finally, investment is directed into space habitats which increases the
frequency of launch and thus reduces launch costs.
Figure 18: Investment Cycle
High-‐Altitude Tourism
Using model inputs of Table 7, an investment and revenue graph was created,
Fig. 19. Where possible, these values match the published values from Virgin
Galactic. The graph shows an investment break even point of 4.5 years, leading to a
46
ROI across 10 years of 182%. Finally, from this model, an output of the total
number of trips taken can be seen in Fig. 20, this number of trips translates to total
passenger of 630.
Table 7: High-‐Altitude Tourism Input Values
Input Value Direct mission cost $400,000 Flights per month (demand)
2
Flights per maintenance
2
Maintenance Cost $50,000 Maintenance time 2 weeks
Figure 19: High-‐Altitude Investment/Revenue
0.00E+00%
2.00E+01%
4.00E+01%
6.00E+01%
8.00E+01%
1.00E+02%
1.20E+02%
1.40E+02%
0% 1% 2% 3% 4% 5%
2012$NPV
$Dollars$
Millions$
Years$
Virgin$Galac6c$Investment/Revenue$
Investment%
Revenue%
47
Figure 20: High-‐Altitude Total Trips
Non-‐Modeled Output
The non-‐modeled output of stepping-‐stone 1 is the implication that high-‐
altitude/space tourism increases interest in space from the general public. This
interest translates to increased investment towards subsequent stepping-‐
stones. The investment increase is modeled by a positive change in performance
parameters. If this model output assumption does not hold true, the single string
design breaks down; subsequent stepping-‐stones should not be attempted.
Debris Collection
The simulation of debris collection shows the number of tons of debris
removed. It starts with an initial value of 2166 tons and fluctuates near zero at the
end. This fluctuation is caused by a continuous increase of debris.
When debris collection is modeled with high-‐altitude tourism, a reduction of
the required investment is shown in Fig. 21. The 10% insurance rate is based on a
48
carry over input from high-‐altitude tourism, and the 7% value is a value entered by
the user for the percent of insurance due to orbital collision. This percentage is low
for high-‐altitude tourism because the probability of collision from orbital debris is
small. After five years, the insurance premium drops roughly two thousand
dollars. This small drop in costs can be associated to the small input value for
insurance cost associated with orbital collision: 7% of 10% of the mission cost.
Figure 21: Reduction in High-‐Altitude Tourism Insurance
Although the cost savings seen by high-‐altitude tourism is low, the savings
are enough to slowly reduce the yearly investment, Fig. 22. By the “end” of the
debris collection process, a cost difference of $10 million per year is obtained.
Figure 22: High-‐Altitude Tourism Investment with and without debris collection
LEO Habitats
Having an increased interest in space and improved conditions of LEO, the
LEO habitat stepping-‐stone can begin. This simulation takes an input values of
Table 8, and outputs investment and revenue, Fig. 23. The breakeven point for this
simulation is 10 years. The entire lifecycle of the habitat is considered, as reflected
in the inclusion of decommissioning costs for the habitats.
Table 8: LEO Habitat Input Values
Input Value Initial Investment $200,000,000 Lease Revenue 120,000,000 over 5 Years, 50% up front Maintenance Cost N(800000000,2000000) Frequency of Launch to Habitats 3 per year per habitat Demand 2 Habitats per year Initial Launch Cost $1000/lb Minimum Launch Cost (after frequency benefit)
$700/lb
9.40E+07(
9.60E+07(
9.80E+07(
1.00E+08(
1.02E+08(
1.04E+08(
1.06E+08(
1.08E+08(
0( 1( 2( 3( 4( 5(
2012$NPV
$Dollars$
Years$
Tourism's$Investment$
With(Debris(Collec<on(
Without(Debris(Collec<on(
50
Figure 23: LEO Habitat Investment & Revenue
Through simulation, it is possible to view the total number of LEO habitats,
Fig. 24. Shown on this graph is the steady growth of habitat quantity for 10 years
followed by a more sporadic period as habitats are being both launched and
decommissioned. This is due to the 10 year lifespan of the habitats.
0"
200000000"
400000000"
600000000"
800000000"
1E+09"
1.2E+09"
1.4E+09"
1.6E+09"
1.8E+09"
2E+09"
0" 1" 2" 3" 4" 5" 6" 7" 8" 9" 10" 11" 12"
NPV
$Dollars$
Years$
LEO$Habaits$Investment$&$Revenue$
Revenue"
Investment"
51
Figure 24: Total # of LEO Habitats
Non-‐Modeled Output
Interest generation from LEO habitats is continued from high-‐altitude
tourism. This interest generates a growing demand in subsequent stepping-‐
stones. Without the increase in demand, the time required to reach breakeven is
increased. Also, the focus of these stepping-‐stones begins to shift from purely
reducing launch costs to developing life sustainability capabilities.
LEO Hub & Moon Base
Utilizing the benefits of reduced launch costs through increased frequency,
and developed LEO infrastructure facilitates life sustainability, the LEO hub and
Moon base stepping-‐stone can occur. Table 9 shows the input assumptions for the
model and Fig. 25 shows the expected investment and revenue. The graph
illustrates that a breakeven point of 8 years is achieved at a total revenue of roughly
52
3 billion dollars. The simulation continues to increase the number of LEO habitats.
Also, initial investment encompasses the costs to establish the temporary Moon
base.
Table 9: Hub & Moon Base Input Values
Input Value Initial Investment $200,000,000 Initial Habitat count (hub) 8 Ticket price to LEO hub $50,000 Ticket price to Moon base $200,000 Cost of Space-‐only Ship $100,000,000 Launch cost/lb for Space-‐only Ships $100/lb Initial Launch Cost/lb for Earth-‐Hub Ships $750/lb Min Launch Cost/lb for Hub-‐Moon base Ships $500/lb Launches to LEO hub per time period 150/yr (average) Launches to Moon base from LEO hub 60/year (average)
Figure 25: Hub & Moon Base Investment & Revenue
The total number of LEO habitats is shown in Fig. 26. This model utilizes 8
habitats from the previous stepping-‐stone. The simulation continues to
decommission and launch habitats based on demand values entered at the end of
0"
500"
1000"
1500"
2000"
2500"
3000"
3500"
4000"
4500"
0" 1" 2" 3" 4" 5" 6" 7" 8" 9"
2012$NPV
$in$M
illions$
Time$in$yrs$
Stepping7Stone$4:$Investment$&$Revenue$
Investment"
Revenue"
53
each simulated year. Revenue of this simulation is generated by ticket sales to both
the LEO hub and to the Moon. Fig. 27, illustrates that, across a 9 year period, the
total number of trips to LEO is 1,600 and to the Moon is 700. The model assumes
that only 40% of people who go to the LEO hub continue onto the moon.
Figure 26: Number of LEO Habitats for SS 4
Figure 27: Trips to LEO Hub & Moon Base
0"
5"
10"
15"
20"
25"
30"
35"
40"
45"
0" 1" 2" 3" 4" 5" 6" 7" 8" 9"
#"of"Hab
itats"
Time"in"yrs"
LEO"Habitats"
LEO"Habitats"
0"
200"
400"
600"
800"
1000"
1200"
1400"
1600"
1800"
0" 1" 2" 3" 4" 5" 6" 7" 8" 9"
#"of"trips"
Time"in"yrs"
LEO"&"Moon"Trips"
to"LEO"
to"Moon"
54
Non-‐Modeled Output
The first assumption for this model is that by the breakeven point of 8 years,
a complete LEO infrastructure is built. This infrastructure is necessary to provide
continued support and cost reductions for stepping-‐stone 4. The second
assumption is that a “pure” space vehicle is developed. This vehicle does not enter
Earth’s atmosphere, and is presumably built in space, thus removing major costs
and reducing necessary shielding. In addition, operational costs are reduced by
utilizing non-‐chemical propulsion such as nuclear power or solar winds.
Permanent Lunar Habitat
Building off of stepping-‐stone 4, the permanent lunar habitat creates the
necessary environment for human life on the Moon. With input parameters shown
in Table 10 investment and revenue graph is created, Fig. 28. With these input
parameters, the simulation fails to achieve a positive ROI within 13 years. The main
reason for this prolonged positive ROI is the high initial investment and the high
cost of operations.
Table 10: Permanent Lunar Habitat Input Variables
Input Value Initial Investment $800,000,000 Regolith Harvested 160k Tons/year Maintenance Cost for Equipment $50,000,000 Time between Maintenance 2.5 Years Operational cost for Base N(100000000,25000000)/year Travel Cost on Moon Number of Initial people at Lunar Base Number of people increase per year
[6] Michael Hoffman. (2009, April) The Show Scout. [Online]. http://blogs.defensenews.com/space-‐symposium/2009/04/03/its-‐getting-‐crowded-‐up-‐there/#more-‐155
[7] NASA. (2009, September) NASA Earth Observatory. [Online]. http://earthobservatory.nasa.gov/IOTD/view.php?id=40173
[9] Leonard David. (2011, August) Space.com. [Online]. http://www.space.com/12602-‐space-‐junk-‐cleanup-‐grand-‐challenge-‐21st-‐century.html
[10] Kate Kelland. (2009, November) The Washngton Post. [Online]. http://www.washingtonpost.com/wp-‐dyn/content/article/2009/11/06/AR2009110603555.html?wprss=rss_nation/science
[11] J Pearson, E Levin, and J Carroll, "Active Removal of LEO Space Debris: The ElectroDynamic Debris Eliminator (EDDE)," 2011.