Trade-Off Analysis of ROI for Capability Stepping-Stones to a Lunar Habitat

Daniel HettemaScott Neal

Anh QuachRobert Taylor

By: GMU SEOR 2012 Senior Design Students:

Agenda• Context• Need & Problem Statements• Design Alternatives• Models• Results• Trade-Off Analysis• Findings & Recommendations

CONTEXT

Benefits of Space• Next Step for humanity

– New unique opportunities• Many new spin-off technologies

invented– Space Race

• The space race during the cold war provided incredible technological advances:

– CAT and MRI machines– Freeze dried foods– Scratch resistant lenses– Eventual development of PCs

Benefits of Space• Large New Market:

– Jobs, new technologies and capabilities• Stimulate economic growth

• Military– Strategic defense capabilities

“(Space programs are) a force operating on educational pipelines that stimulate the formation of scientists, technologists, engineers and mathematicians…They’re the ones that make tomorrow come.”-Neil deGrasse Tyson

Investment Below “Critical Mass”

• Critical Mass: investment threshold which, once surpassed, irreversibly begins the development of space

• When spending was sufficient, progress was made.– Currently not enough investment– Slow progress and inefficient

spending results

Government Funding• Decline in US government

investment

% USFederalBudget allotted to NASA

NASA Annual Budget statistics. The World Almanac and Book of Facts 1960 through 2001.

1st Man on Moon

Space Shuttle

Past and Current Investments

• Governments– USA– China– Russia– Brazil– India

• Private Industries Currently investing:

• SpaceX ($100M)• Bigelow Aerospace

($180M)• Virgin Galactic ($100M)• Many others

Limiting Factors for Investment

• Launch Costs– Too high

• Insurance Costs– Debris– Failures in technology– Too much risk

• Probability of negative ROI very high

2500023800

1000 (SpaceX pro-jected)

"Historic Trend of $/lb to LEO (all values global av-erage unless denoted)"

Historic Trend of $/lb to LEO

www.Spacex.comSpace Transportation Costs: Trends in Price Per Pound to Orbit 1990-2000.” Futron. 06-Sep-2002

Debris Growth Over Time

J. Pearson, E. Levin, and J. Carroll. “Active Removal of LEO Space Debris: The ElectroDynamic Debris Eliminator (EDDE).” August 31, 2011. http://www.washingtonpost.com/wp-dyn/content/article/2009/11/06/AR2009110603555.html?wprss=rss_nation/science

Launch Failure Rate

“Optimal” Coordinated Stakeholders

Provide Launches

Demand for Launches

Clean LEO

CleanLEO

Funding,Regulation

Demand for Trips

Regulation

Regulation,DemandforHabitats

Habitatleasing

CivilianSpaceTravel

High-Altitude/

SpaceTourism

DebrisCollection

Space HabitatsLaunch Services

Demand for Habitats

Habitats

Government

SatelliteCompanies

Earth’s Population

Reality #1: Debris Collection Underfunded

Clean LEO

CleanLEO

NegligibleFunding

High-Altitude/

SpaceTourism

DebrisCollection

Space HabitatsLaunch Services

Government

SatelliteCompanies

No funding

No Funding

Debris Collection Tension

Reality #2: Space Habitats need Bootstrap Funding

No Funding

Demand for Launches

NoFunding

Habitatleasing

DebrisCollection

No FundingHabitat Leasing

SatelliteCompanies

High-Altitude/

SpaceTourism

Launch ServicesGovernment

Space Habitats

Reality #3: High Cost of Launch Services

Provide Launches

Demand for Launches

DemandforHabitats,Regulation

Habitatleasing

High-Altitude/

SpaceTourism

DebrisCollection

Space Habitats

Launch Services

Demand for HabitatsHabitatLeasing

Government

SatelliteCompanies

Launch costs remain highbecause there is no consistent demand

Major StakeholdersStakeholder Objective IssuesHigh Altitude Tourism Foster/maintain interest in space Feasibility

Debris Collection Clean LEO Lack of funding

Satellite Companies Lower orbital costs, increase satellite lifetime

High, increasing orbital risk, launch costs

Space Habitats Inhabit LEO, provide research environment

Lack of interest, launch costs

Launch Services Provide competitive launch cost Launch costs decrease with frequency, but not enough demand

Space Tourism Sustainable space-based tourism Insufficient technology, exposure, capability

Government Regulation, Funding, Strengthen economy

Focused on near-term

Earth’s Population Better life Focused on near-term

Private Industry

Investors

Disinvestment Cycle

NEED & PROBLEM STATEMENTS

Need StatementThere is a need to break the

disinvestment cycle, by focusing on reducing launch costs, and insurance premiums, that will

lead to a profitable development of space.

Problem StatementEvaluate the costs and revenues

of space markets to develop synergy in investments of

capabilities that will break the disinvestment cycle.

DESIGN ALTERNATIVES: STEPPING-STONE CAPABILITIES

Project Scope• Stepping-Stones to a lunar Habitat• Focus on combining existing

solutions to address:– Launch– Debris– LEO Habitats– Lunar Habitats

• Single String design

Capability Stepping-Stone 1

Stepping-Stone 1: High-Altitude TourismVirgin Galactic Tourism Trips (2013)

Capability: Commercial Tourism to Space

Focus: Encouraging seed funding

Stepping Stone 2: High-Altitude Tourism and Debris Collection

Capability: Reduce risk in space by loweringthe amount of debris in space.

Focus: Reduces insurance rates

Stepping-Stone 3:LEO HabitatsBigelow Aerospace

Capability: LEO Life Sustainability

Focus: Reduces Launch costs

Stepping-Stone 4:LEO Hub and Moon Base

Capability: Extension of tourism to the Moon,Development of space-exclusive personnel shipsTemporary Habitation of the Moon

Focus: Reduce launch costs & space exclusive ship

Stepping-Stone 5:Permanent Lunar Habitation

Capability: Lunar life sustainabilityLunar Mining & ManufacturingFoundation for delving further into space

Focus: Sustainability

Building Block DiagramHigh-Altitude Tourism serves as the catalyst to incitethe interest, and therefore the investment, of the Earth’s population in space.Debris Collection serves to reverse the trendof declining conditions in LEO

Interest &Investment

Reversethe

Building Block Diagram (cont’d)

LEO Habitats-LEO sustainability

-Increased Frequency of launches = Decreased Launch Costs-Interest from government/private industry

-Environment to conduct research in space

Reversethe

Launch Costs

Gov’t/PrivateInterest

Launch Costs

Hub & Moon Base-Temporary presence on the Moon-Continued Decrease of launch costs-LEO & Lunar Tourism-Space-exclusive Ships-Extension of Sustainability into space

Launch Costs

Reversethe

Launch CostsExtension of sustainability

Permanent Moon Base-Permanent Presence on the Moon

-”Live off the Land”-Lunar Mining and Manufacturing-Platform for delving further into space

Reversethe

Launch Costs

Launch CostsExtension of sustainability

Decision Support Tool: ROI Calculator

• Each capability stepping-stone will be evaluated in terms of investment and return on investment for the industries involved

• Users will be able to vary inputs into each capability stepping-stone to see how adjusting the price of a ticket will affect the rate of return.

• Allow companies to identify minimum selling prices for commodities to attain ROI in a specified number of years.

Design Thesis Statement

It is feasible to break the disinvestment cycle using capability stepping-stones.

MODELS

Top Level Model

Goal: To create a positive feedback loop for stepping-stones investment

Stepping-Stone 1: High Altitude Tourism Financial Model

• Focus: Finding best ROI given:

• Equation: Profit =

Virgin Galactic

Initial Investment

Ticket Price

Number of trips

Development Costs= Cost of Ship

Maintenance CostsDecommissioning

Stepping-Stone 2: High-Altitude Tourism + Debris Collection

• Input/Output Diagram

• Limitations– No crashing

• Assumption– Debris collected is not salvaged

Virgin Galactic+

Debris Removal

Initial Investment ROINumber of tripsTicket Price

Current Debris Quantity New Debris Quantity

Reduced Insurance Costs

•Validation• Based on Star Tech Inc

Debris collection model•Purpose of model:

• To show the effect of debris collection on insurance rates

Stepping-Stone 2: High-Altitude Tourism + Debris Collection

• Major Equations:– High Altitude Tourism ROI equation

(SS1)– Debris Collection Equation

• – xi = debris in the atmosphere– xi+1 = debris in the atmosphere after time step– d = amount of debris added per time step– n = number of debris collectors (12, variable)– r = rate of collection– e = efficiency of collection

Efficiency of Debris Collection_

Stepping-Stone 3: LEO Habitats

• Focus: LEO Sustainability• Input/Output Diagram

• Modeling from the perspective of Bigelow AerospaceProfit =

LEO Habitats

Initial Investment ROI

Demand People in space

P = habitat lease price CMH= Maintenance cost for habitatCh= cost of habitat Lh = lifetime of habitatCLH= cost to launch habitat MTBFH = estimated habitat failure rateCLP= cost to launch people to habitat n = number of habitats

Launch Costs Reduction through Scale

• Stepping Stone 3 & 4 involve the launching of habitats, as well as launching inhabitants, and maintenance personnel for the habitats

• The frequency of traffic to and from LEO increases, which translates to reduced launch costs

Launch Cost Reduction Curve

Stepping-Stone 4: LEO Hub & Moon Base

• Capabilities obtained:– Space-exclusive ships

• No re-entry• Solar or nuclear powered (non-chemical)

– Temporary Colonization of the Moon• Assumption

– Capacity of 10 for both ship types (Earth-Hub, Hub-Moon Base)• Purpose of Model:

– Investment in longer-term tourism in space, both to the hub and the Moon

Moon Base

Initial Investment ROI

# of Habitats comprising Hub

Demand # people travelled to the Moon

Hub traffic and commerce

Stepping-Stone 4 Equation

• Model from the perspective of generic Tourism CompanyProfit =

TH = Tickets to HubPTH = Price of ticket to hubTM = Tickets to Moon BasePTM = Price of tickets to Moon BaseCH = Cost of hubCMB = Cost of Moon baseLMB = Lifespan of Moon baseMTBFMB = Failure rate of Moon BaseCM,MB = Cost to maintain Moon BaseLH = Lifespan of HubMTBFH = Failure rate of HubCM,H = Cost to maintain Hub

x = Earth-Hub Ships y = Hub-Moon base ShipsCx = Cost of Earth-Hub ShipCy = Cost of Hub-Moon Base ShipCapx = Capacity of Earth-Hub ShipCapy = Capacity of Hub-Moon Base ShipLx = Lifespan of Earth-Hub ShipMTBFx = Failure rate of E-H ShipLy = Lifespan of Hub-Moon Base ShipMTBFy = Failure rate of H-MB ShipCM,X = Maintenance cost for E-H ShipCM,Y = Maintenance Cost for H-MB Ship

Stepping Stone 5: Permanent Lunar Base

• Limitations– Mining is limited to the Moon

• Assumption– Water, Oxygen and Nitrogenare harvested through regolith processing

PermanentLunarBase

Initial InvestmentROI

# of people living on Moon

Sustainable?

•What the model shows:• ROI• Feasibility of Sustainability on

the Moon

Tons of Water, Oxygen Processed

Stepping-Stone 5 Equation

Profit =

R = Average Regolith Payloadn = Number of PayloadsCB+E = Cost of Base & EquipmentCo = Operating Costs/yearCm = Maintenance Costs/yearCt = Travel Cost on Moon/lbP = Average PayloadT = Number of Trips/year

Models• Each capability stepping-stone has an

independent model• Constructed using SPEC Innovations NimbusSE

– Can utilize database capabilities to do traceability, track changes

– Allows users to observe the effects of changes on the model

– Provides visual clarity in constructing parallel processes

• All cost calculations are using NPV

• p = inflation = .03 k = rate if saved = .04

RESULTS

Disinvestment Cycle

Investment Cycle

Overall ResultsStepping-Stone Breakeven

Point (yrs)Investment Revenue ROI after

10 yrsHigh-Altitude

Tourism4.5 $111M $230M 182%

Debris Collection None NA NA NoneLEO Habitat 10 $1.35B $1.3B 98%LEO Hub & Moon Base

8 $3.7B $4.43B 118%

Permanent Lunar Habitat

22 $17B $13.4B 79%

Capability Stepping-Stone

Stepping-Stone 1: High-Altitude Tourism

Initial Investment: $100 millionDirect mission costs: $400 thousandInsurance premium percent: 10%Ticket price: $200 thousandPeople per ship: 6

Stepping-Stone 1

• Key Output Assumption:– Doing space tourism increases

interest in space, thus increasing investment

– This interest & investment is key to having the other stepping-stone become more viable

Stepping-Stone 1

Stepping Stone 2:High-Altitude Tourism + Debris Collection

Stepping-Stone 2

• Key Output:– Without a continuing debris

collection there is an increasing extra cost associated with LEO habitation from collision risk

Stepping-Stone 2

Stepping-Stone 3:LEO Habitats

Initial Investment: 200 millionLease cost over 5 years: 120 millionPercentage up front: 50%Cost to build 1 habitat: 75 millionMTBF: 2.5 yearsLifecycle: 10 years

Stepping-Stone 3

• Key Outputs:– Continuing interest generation and

investment increases– Shifts focus from increasing launch

capability to life sustainability

Stepping-Stone 3

Stepping-Stone 4:LEO Hub and Moon Base

Stepping-Stone 4

Initial Investment: $200 MStarting Habitats: 8Ticket price to LEO: $50 KTicket price to Moon: $200 K

Stepping-Stone 4• Key Outcomes:

– Are making frequent trips to Moon– LEO infrastructure is built– “Pure” space travel vehicle (does

not enter Earth’s atmosphere)• Reduces travel costs by relying on

non-chemical propulsion

Stepping-Stone 5:Permanent Lunar Habitation

Initial Investment: $8 BAmount of Regolith removed per quarter: = 40,000 tonsOperational Costs: ~$1B/yrPeople: 50 start, growth of ~20

Stepping-Stone 5

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 9 9.5 1010.5 11

11.5 1212.5 13

Stepping-Stone 5:Investment & Revenue

Investment

Revenue

Time in yrs

TRADE-OFF ANALYSIS

SS 5 Cost Reduction

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 9 9.5 1010.5 11

11.5 1212.5 13

Stepping-Stone 5:with 20% cost reduction

Investment

Revenue

SS 5 Cost Reduction• Travel costs: $100/lb to ~ $45/lb• Increase removed regolith:

160,000 tons to ~ 248,000 tons• People:

– Start: 50 to 25– Growth: 20 to 5

• Operational Costs: $1B to $650M

Investment Required based on Debris Removal

Potential Investment for SS 4

Effect of No Mining On Moon

• Have to Launch ALL materials from Earth– Structure, life essential elements,

provisions• Ignoring Earth based purchase

costs• Using same launch cost as in SS.

5 ($250 / lb)

Effect of No Mining On Moon

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 9 9.5 1010.5 11

11.5 1212.5 13

Stepping-Stone 5:Mining vs No Mining

No Mining Investment

Mining Investment

Time in Years

FINDINGS & RECOMMENDATIONS

FindingsThesis Statement: It is feasible to

break the dis-investment cycle using capability stepping-stones.

The capability stepping-stones adequately address the issues of launch cost, insurance cost, and investment below critical mass.

Recommendations• To make LEO Habitats

economically feasible, debris collection must have already begun– Cost savings of $1 Billion over 10

yrs• Unless total launch cost are

reduced to $100/lb, a space exclusive vehicle is beneficial to keep future cost low– Cost savings of $800 Million over 8

Capability Investment Rank-List

Investment Order Capability Savings

1 Debris Collection $1 Billion

2 Launch cost $800 Million

3 Habitats NA - Necessary

4 Space exclusive ship $800 Million

5 Life sustainability NA - Necessary

RecommendedCapabilityStepping-StoneTimeline

Each stepping-stone starts when the previous stepping-stone has reached 80% ROI

Continuing Work• Gain access to industries’ data

private cost and performance values

• Expand the depth of each of the stepping-stones, focusing on:– Debris Collection– LEO Habitats with Lunar Trips

QUESTIONS

“I haven’t seen this level of analysis on this topic before. This analysis and outcome is a very useful “stepping-stone” for policy decisions and next level of analysis. Well done!”

- Dr. Steven Dam, President, SPEC Innovations

Trade-Off Analysis of ROI for Capability Stepping-Stones to a Lunar Habitat

Documents

Transcript of Trade-Off Analysis of ROI for Capability Stepping-Stones to a Lunar Habitat

Stepping StonesStepping Stones Programme Stepping Stones Stepping Stones Programme Volunteering – enhancing employability A Career Development Programme.

Stepping stones issue 10

Stepping stones

Stepping Stones - ERIC

5h grammar stepping stones

ABC'S AND 123'S CROCHET PILLOWS STEPPING STONES CROCHET PULLOVER | CROCHET | CROCHET · 2019-03-25 · stepping stones crochet pullover | crochet 1 of 5 stepping stones crochet pullover

Interoperability Stepping Stones...Interoperability Stepping Stones Release 7 December 2009 Published by now Trusted Connectivity Alliance

Stepping Stones Issue 4

Stepping Stones Disability Disclosure

Stepping stones issue 11

Wild Work Stepping Stones Youth Programme Case Study · The Stepping Stones Programme . Background and Methodology . Wild Work’s . Stepping Stones. Youth Programme is based on the

Stepping Stones Strategy

Stepping The Stones News · supporting Stepping Stones in this way, please call 914.232.4822 or email info@steppingstones.org MISSION: The Stepping Stones Foundation is dedicated

Stepping Stones to Using Data

Stepping Stones in Vanuatu 4

Stepping Stones in Vanuatu

Stepping Stones Two Wells

Stepping stones Cirencester Gloucestershire

STEPPING STONES PRODUCT CATALOG

Stepping Stones Fall 2009