Would a Reusable Falcon Hurt SpaceX?

What happens if SpaceX is successful at achieving its Falcon reusability goals.  Here is the video of SpaceX’s plans to recover and reuse the majority of its Falcon launch system.

Let me make some assumptions about a Reusable Falcon (R-Falcon) to make my point that such a system may pose challenges for SpaceX.

On the surface, an R-Falcon would be great.  If my assumptions below are accurate, only $16M per flight, a flight every 30 days, only two thousand dollars per KG.  From a consumer perspective this would be great!  SpaceX is adding reusability to the large rockets they already have.  And they will probably be successful at it.  They do seem to achieve what they put their mind to, however, could there be an easier road to reusability?  Let’s explore the possibility.  First what could a large reusable system like SpaceX’s look like (dollars values in millions)?

  

I am still amazed we can’t build Saturn V’s today.  We built them before.  We went to the moon in them for goodness sake!  We knew how to build them…why don’t we know now?  Two major reasons:

1. We don’t have the tooling/plans – long since destroyed or lost
2. We don’t have the knowledge – the NASA/contractor engineers have retired/passed away

 Surely such a reusable system like the R-Falcon could avoid these Saturn-V pitfalls…right?  If you look at the table above you see I estimated SpaceX builds eight initial R-Falcons.  This high number addresses the unknowns about number of flights per R-Falcons.  Will it really be 10 flights per vehicle as I estimate?  And how long will it take technicians to refurbish and integrate the next payload? 6 weeks?  8 weeks?  With flights every month and 6-8 week refurbish and integration windows, multiple R-Falcons will be needed.

So here is the problem.

After the initial push to develop the R-Falcon fleet, at the usage rates outlined in the table, you would NOT NEED TO BUILD another R-Falcon for 6.5 years!

So SpaceX could avoid throwing away their tooling (unlike the Saturn V), but could they keep a knowledgeable team around ready to build the next R-Falcon 6.5 years after the first fleet was completed?

And even if you believe eight R-Falcons in the initial fleet is too many and want to reduce the fleet size, demand rates of one per month means SpaceX would only need to make approximately one R-Falcon per year to keep up with demand.  Not exactly mass production – 1 vehicle per year.  Can you keep the production team “sharp” on 1 vehicle per year?

How can it be, as a consumer, I love the R-Falcon (yay $2k per KG), but as a business, could the R-Falcon be a bad way to prove a reusable launch vehicle?  Could the R-Falcon launch too much payload and launch too infrequently?

Let’s talk about an alternate business approach that could address some of these challenges.  I said above that my hypothetical R-Falcon has two problems:

•  Launching too much payload
• Launching too infrequently

How could a new hypothetical company do reusable launch better?  What if you launch less mass but launch more often?  So let’s make up a hypothetical launch system – the “Kinglet.”  Since this is a business blog, let’s not get bogged down into the technical details except that instead of launching 7,000KG per flight, the Kinglet will launch 100KG.  And instead of paying the R-Falcon’s $5M for range access per flight, the Kinglet pays $200K per flight for its range or range-like services (airport, spaceport, other?).  Here is the table for such a system (dollars values in millions).

The Kinglet is a smaller launch system but aims for a higher flight rate, targeting weekly flights instead the R-Falcon’s monthly flight rate.  As a potential customer, I do not like the 10x higher price I pay to use Kinglet ($20K per KG vice the Falcon’s $2K).  But flying weekly may be attractive to some customers.  Overall though, this appears to be bad for customers (most customers could wait a month to fly).  But from a business perspective, all things being equal, a small reusable launch system like Kinglet has a much higher probability of success because it starts small.

Where the Falcon struggled to keep its production line open with only one new vehicle per year, the Kinglet will need to produce five systems per year to keep up with demand.  Now five launch vehicles per year is still not mass production, but those volumes will, not only keep the production team sharp, but provide five times the opportunities to roll in product and production improvements into the newer vehicles than would be possible on the R-Falcon production line.

Could a smaller reusable system avoid R-Falcon's hidden pitfalls?  Maybe.

So the last question to ask is, what needs to be launched at least weekly with a mass of under 100KG? 

Here is the excel file with tables from this post if you want to change the assumptions.

Does your Mom Understand your Business Plan?

Several months ago Jonathan Goff, CEO at Altius Space Machines, called me.  ASM was preparing for a business plan “sprint” to compete in the 2011 Heinlein Business Plan competition in Silicon Valley (hosted by the Space Frontier Foundation).  Could I help with the business stuff?

Jon had been pitching his new technology – “Sticky Boom” which is a really long tube with glue pads on the end of it.  Only the tube can be rolled in or out and the glue can be turned on or off via an electric current.  Altius knew Sticky Boom had space rendezvous and docking applications (think servicing satellite, grabbing lost wrenches during EVAs, etc.), but could we wrap a business around this cool technology?

Assisting on the Altius Business plan has been a big part of my life over the last few months which is my excuse for light blogging.  

I am pleased with the result (yes, we won the $25K grand prize).  Here is Jon Goff, Altius's CEO, pitching the plan (worth watching to get a better feel for what ASM is really trying to do as a company - about 6 minutes long).

Here are a few highlights the team at Altius and I kept discussing while developing this plan:

• Is there a problem people will pay you to solve?  If not, you do not have a market.
•  An attractive Market is even more valuable than an attractive technology.  New space technology is cool to us space nerds, but markets determine how valuable company technology really is.
• Your customer is the organization that pays you – not necessarily the group that uses your product.
• Once you have found a market, be cautious before competing head to head with incumbents (those competitors already selling to your market) – how do you take market share away at the edges without drawing an incumbent response – a disruptive strategy .
• Management team – do you have the right team?  This is so important.  If you get the market and management right (and maybe a little traction), investors know that even if the product or technology changes over time, the company will have a good chance at success.  There is no substitute for the right market and the right team.
• Money: how much do you need and how are you going to get it?  Banks probably won’t lend to you (at least not at first).  Investor money is an obvious choice but have you thought about govt contracting or strategic partnerships?
• Few investors understand NewSpace (if you find one that does, keep him/her happy!).  The industry is small and in its infancy.  It is not right to expect Tech and Biotech investors to immediately understand: ISS regulations, LEO vs GEO, terminator tethers, plane changes, lagrange points, etc.  The question becomes how to present your idea in terms/images VC’s will understand while still being concise?  I recommend pitching your deck to your spouse or your mom.  If your Mom doesn’t understand your plan, VC’s won’t take the time to understand it either.  Simplify.  Simplify.  Simplify.
• The “prize” in most public competitions is the publicity and connections made as a result of winning, not in a the few dollars at stake.  This is what the Google X-Prize teams are fighting over – the media rights!  To highlight the value of publicity, here are a few of the Altius Space Machines articles that have been written since winning the prize.  Ask yourself how long it would have taken to generate this media attention without the win?

List of articles:

1. Aviation Week
2. CNBC
3. The Space Review
4. Business News Daily
5. Plus the sites that published the press release or the many posts by NewSpace blogs (thanks guys).

Business plans are like going to College – professors push you to do what you probably could not discipline yourself to do on your own.  This is why we have all-nighters finishing 20-page papers and cramming for tests.  On your own, you would just go to bed.

Business plans are great forcing functions and entrepreneurs learn a lot through the process.  I am glad I got to be apart this journey.

Here was some great advise we tried to follow when preparing the slide deck for the competition:

Pitching Hacks Preview

View more documents from Venture Hacks

Commercial Asteroid Return to Station

Back in 2010, Michael Mealing began to consider a spacecraft mission to capture and return a very small Near Earth Object (NEO) to the ISS or Bigelow module for study. He writes about business concept here. Michael’s point, humanity will only travel into the solar system if they can make money at each step. NEOs may be the next step after LEO.

Then in January, 2011, the topic of a NEO capture and return to LEO comes up again in the comment discussions on the Space Business Blog here. So Michael and I have teamed up to continue refining this business concept.

Here’s a Pencast describing the basic concept for a mission to return a small asteroid sample to a space station in LEO.  I also include a few markets that might make such a mission profitable.

NEO Return to Station

brought to you by Livescribe

Moon dust legally for sale - $50K for a few small specs. 

Next, I will walk you through the spreadsheet model built to analyze what would be required for a mission like the one described in the Pencast above.

Assumptions:

1. Spacecraft launched to LEO Space station to standby until target asteroid has been identified.
2. Spacecraft launched from LEO space station and returning to LEO space station.
3. Haul all propellant for round trip (no refueling).
4. A duplicate amount of Delta-V will be required for both the trip out to the asteroid and the trip from the asteroid back to a LEO space station (assuming NO aerobraking to avoid damaging asteroid). Note: The mission’s costs could be greatly reduced if one could determine a smart engineering method to reduce the needed delta-v for the return trip to a LEO space station.
5. Mass of dry spacecraft: 200Kg (Similar to NEAP but swap out all of NEAP's science gear for some type of grappling mechanism).
6. Engine efficiency Isp = 342 seconds.
7. Although spacecraft is docked to LEO space station before mission start, this model assumes no propellant boil-off or LOX top-off prior to mission start. 
8. Since the target NEO is still undetermined, multiple Delta-V’s were modeled to reach NEO targets. Delta-V’s between 5500, 4500, 3500, and 2500 m/s were considered.
9. Asteroid 2010 RF12 has a radius of 3.5m and a mass of 500,000kg according to NASA. Prorating these values to a radius of 0.5m gives you a sphere slightly smaller than the desired “refrigerator” in Michael Mealing’s earlier posts with a mass of 71,429Kg. This mass is larger than what I wanted to consider for a proof of concept mission, so although I include the 71K Kg mass in the analysis, I focus on target asteroid masses of 500, 300, 100, 50, 25, and 10Kg.

Conclusions:
The table below is the summary of my analysis. The columns in the table below represent the multiple delta-v’s modeled for our 200Kg spacecraft to travel from a LEO space station and AR&D with the target NEO. The rows are the various NEO masses that were considered (or – how big of a rock the mission can go out and get). The data populated (the cells with numbers) are the total mission masses for each combination of delta-v and NEO mass. The total mission mass includes all propellant needed not only to reach the NEO but to return it to LEO as well. The color coding correlates to the launch vehicle table below – Dnepr in green, Falcon 9 in orange, and Falcon Heavy in purple.

A few Observations:

• Finding low delta-v targets will dramatically increase the size of the asteroid one could successfully return. For example, instead of a 10Kg target at 5,000m/s of delta-v, the same spacecraft could return a 500Kg target if only 2500m/s of delta-v were needed to reach it (and at almost half the total mission mass!) – that is a lot more rock for scientists to analyze – 500kg instead of 10kg.
• Are there ways to decrease the delta-v required to reach these targets or return from them (currently avoiding aerobraking, but maybe a small asteroid could be shielded during aerobraking)?
• Because such small NEO objects will be difficult to spot a head of time (there are many more NEOs than we have on record - especially small ones), such a mission has to be very patient waiting on station many months/years for the “perfect” NEO to approach with the right blend of low delta-v and a mass that is “just right”. And to respond to new targets, the mission must be ready to depart the station on very short notice in pursuit of any newly identified targets.
• Growing humanity’s knowledge of very small NEOs increases the chances of mission success.

Here is an example of the tables I built to analyze propellant needs. Here are the tables feeding the 5500 m/s of delta-v column. The colored cell in each table varies the asteroid masses. Here is the interactive spreadsheet for those that want to modify my assumptions and want to view the tables for the delta-V's modeled as well.

Delta-V 5500m/s:

Next steps:
Michael and I plan to refine this concept over the coming months. Look for follow-up posts here on SBB and over on Michael’s blog.

Business Case for a CubeSat-based Earth Imaging Constellation

The use of Commercial Earth Imaging Satellites is growing. Individuals, corporations and governments are finding varied and unique applications for images of our planet.

Futron estimates the market for commercial earth imaging topped $1B last year (2010).


Uses of Earth Imaging:

• Disaster Relief – think of all of the satellite images you saw after the Japan Earthquake (including the nuclear reactors)
• Disaster avoidance - George Clooney (among others) paying to patrol boarder of north and south Sudan using Earth imaging satellites.
• Helped with hunting down Osama bin Laden (but were any these images from commercial satellites?)
• Food Commodities tracking – allowing traders to ask and answer questions like, “how do the wheat crops in Kansas look after last night’s hail storm?”
• Remote Infrastructure observation – the oil industry uses it to keep track of their assets in remote locations
• Even the US Government is turning to Commercial providers. Last year, the U.S. National Geospatial-Intelligence Agency (NGA) awarded separate 10-year, $3.5 Billion contracts to image providers DigitalGlobe and GeoEye (these contracts are now under review).

The Commercial earth observation markets:

1. Market #1: High-Resolution images (1.5 meters per pixel). But the cost of each satellite means providers have a limited number of satellites (usually 1-2) on orbit.
2. Market #2: Med-Resolution images (5-7 meters per pixel) – lower quality images, but providers tend to have more satellites in orbit and may offer more spectral bands to choose from for each image and offer more frequent photo opportunities due to the higher number of satellites within the constellation.

In a recent Nov 2010 paper, “6U CubeSat design for Earth observation with 6.5m GSD, five spectral bands and 14Mbps downlink,” author, Dr. Steven Tsitas outlines how a constellation of 6U CubeSats could serve Market #2 (frequent med-res images) competitively. (Sorry, I think you will have to buy the paper. If a reader finds a free version of the paper online, let me know and I will change the link). I hope to post an interview with Steven Tsitas soon.

But why even consider a CubeSat at all for such a mission? Here are just a few of the advantageous of using CubeSats:

• High amount of innovation in the field – from NASA, universities, and private industry
• Low ITAR restrictions (CubeSat programs are thriving in many nations)
• Low mass of each satellite
• Reduced launch cost per satellite
• Reduced cost to replace/upgrade constellation as satellites age, breakdown, or new technology becomes available

Rapid Eye, a German company, is the current leader serving Market #2. Below I will provide some details about Rapid Eye and how a CubeSat constellation might be able to compete with Rapid Eye.  First, a little education about Rapid Eye.

Rapid Eye Details:

• Five identical sun-synchronous Earth observation satellites
• Five spectral bands
• Launched in August 2008
• Satellites built by Surrey UK
• 650KM circular orbit
• Captures 4mil km squared of earth’s surface every day
• Once an order is placed for an image, can take a photo of any location on earth (between 75 degrees N and 75 degrees S) within 24 hours.
• Offers not only images, but offers services for the analysis of images – especially good at providing comparative analysis of images taken over a period of time

Rapid Eye, the Numbers:

• Customer price for images: $1.33 per square KM (must purchase 5,000 KM at a time (at current Euro conversation rates that is equal to $6650 per very large image)
• Satellite Constellation construction: $35M 
• Expected 2009 Revenue: $29.5M (have not confirmed this number)
• Total Capital needed to break even: $224M

Assumptions about Rapid Eye’s business:

• Assumed Rapid Eye is now profitable
• Assumed the cost of the single Dnepr launch necessary to lift the five Rapid Eye sats: $15M
• Assumed a $50M infrastructure Hardware purchase (ground station and other startup infrastructure)
• Assumed a five year startup at a cost of ~$25M per year in operating (non-HW, non-infrastructure costs)

So what if we could launch a constellation of ten cubesats that could perform a very similar function as Rapid Eye’s current constellation of five small sats? Are their savings if we could? For this post, I will use Steven Tsitas’s conclusions that, yes, such a cubesat constellation would be technically possible.

I will build my business case, not from a technology discussion, but by attempting to answer the business question of - how much could an business save by using Cubesats instead of small sats?

CubeSat Venture Assumptions:

• Cost per 6U CubeSat: $400,000
• Number of CubeSats in constellation: 10
• 6U CubeSat mass: 8 lbs each
• Falcon 1 launch: $9.8M
• SpaceX willing to prorate launch cost based on mass

If we assume the CubeSat venture would operate using the same Hardware and Operating Costs as the Rapid Eye venture, then the CubeSat savings are limited to the cost of the satellites themselves and the cost to launch them into orbit:

• Rapid Eye’s satellite and launch costs: 23% of breakeven costs
• CubeSat venture’s satellite and launch costs: 3% of breakeven costs

This would mean a CubeSat venture competing with Rapid Eye could theoretically lower image prices by twenty percentage points over competitors (all other things being equal). This by itself may close the business case for some CubeSat constellation investors.

But perhaps competing toe-to-toe with Rapid Eye is the wrong business model. As a general rule, it is hard to out Wal-Mart, Wal-Mart. What-if the CubeSat earth imaging venture could, instead, become the low-price, no frills, earth imaging provider?

In the earlier example, the CubeSat advantage was limited to lower satellite costs and cheaper rides to orbit on SpaceX launch vehicles. But what-if the venture could also save money on ground costs: Hardware/ground stations and operating expenses?

CubeSats, the low-cost leader in earth imaging Assumptions:

• Continue with assumptions regarding low satellite costs
• Continue with assumptions regarding low launch costs
• Lower ground Hardware and Infrastructure costs from $50M to $25M
• Lower operating costs from $25M to $10M per year.

Here is a quick cost comparison between the options:


















Next Questions (beyond the scope of this post):

• Market price elasticity: How price sensitive is the earth imaging market? How would cutting Rapid Eye’s price by 20-60% affect demand for a CubeSat-based image product?
• What realistic cost reduction methods are possible in ground hardware and personnel?
• Admittedly, my Rapid Eye information was limited to publicly available data, a more serious effort should be conducted to understand the competitor’s cost structures and current profit forecasts
• What are the cost implications from using a CubeSat-based system? Where are system costs reduced? Where are system costs increased?
• Admittedly, images from a CubeSat are of a lower quality than the best in orbit (5-7 meters per pixel compared to 1.5 meters per pixel from the industry leaders of market #1).  How sensitive is the market to image quality?  And what can be done to increase the quality of an image taken on a 6U CubeSat?

Mining Asteroids is Hard

With the costs of rare earth metals on the rise, why can’t space entrepreneurs mine asteroids for platinum and other REM’s and return the materials to earth? Shouldn’t finding so many near earth asteroids make the problem even easier to solve (less delta-v to reach these nearby asteroids)?

Usually this blog focuses on the positive – on the how you could make this happen. Today we are going to look at how hard it actually would be to close such a business case.

Assumptions:

• Mission: Mine platinum on NEOs and return the processed ore to earth for sale and consumption. Sale of platinum sole revenue source for the mission.
• Mining Efficiency: for every one kilogram of mining equipment launched, the machinery could mine 100 times that amount of NEO material (2500kg mining device could mine 250,000kg of NEO material)
• Mining Device mass: 2500 kg
• Platinum concentrations on the NEO: 0.3%
• Price of Platinum per kilogram: $58,500
• Mission Cost: $600M

Based on these assumptions, the sale of the platinum mined on the asteroid would cover 7% of the mission costs. This business plan stinks. Not 7%, that seems too small. Really? Only 7% of mission costs could be covered with the assumptions above? Well how elastic are these assumptions? How far would we have to modify the assumptions to get more satisfying results?

Below I explored five what-if’s:

1. What if platinum was found in higher concentrations?
2. What if the mining device could mine more?
3. What if the price of platinum were higher?
4. What if mission costs were reduced?
5. A Hybrid what-if.

What if platinum was found in higher concentrations.
The table below shows platinum concentrations would have to exceed 4% to cover mission costs.

What if the mining device could mine more.
The table below shows the mining device would need to mine over 1300x its own mass to cover mission costs.

What if the price of platinum were higher.
The table below shows the price of platinum would need to balloon to $800,000 per kg to cover mission costs.

What if mission costs were reduced.
The table below shows mission costs would need to be reduced to $44M.

Baseline Conclusions.

• Mining asteroids is hard
• Platinum mining to serve terrestrial applications is ridiculously hard to justify using these baseline assumptions
• Entrepreneurs may have to seek business plans that fundamentally change these assumptions or offer their product to non-terrestrial customers

A Hybrid what-if.

But I can’t leave a post with such reserved pessimism. The table below shows that if an entrepreneur could find a NEO with platinum concentrations significantly higher than average even while assuming a less efficient mining device, such a mission may be possible if the costs could be reduced to less than $150M.

Have fun (in a nerdy spreadsheet kind of way) building your own platinum mission by using the spreadsheet located here.

[UPDATE: I fixed the spreadsheet so readers can download the file in MS Excel]

LEO-to-GEO Tug Part 3: And Beyond...Bigelow to L1

In my FIRST post in this series, I discussed the benefits of a Falcon-tug architecture to transfer very large comsats from LEO to GEO (saving money over the Delta-IV Heavy price).

In  my SECOND post, I discussed the potential of a Falcon-tug architecture to carry a 10,000kg comsat to GEO (59% more payload than is currently possible on a Delta-IV Heavy).

In this, my THIRD post, I will discuss lagrange points. 

I do not intend to describe why one would use EML1, Rand Simberg and many others have posts on this topic if you are unconvinced.  Here is a Simberg lagrange post from 2006 in which he articulates several reasons to utilize EML1.  Instead, I will focus on the financials of such a mission. 

Using a Falcon 9/Transfer Tug architecture, what interesting payloads could you transport from LEO to EML1 (instead of GEO)? And at what cost?

The funny thing about orbital dynamics (which I am only a new student), if you can launch 10,000kg to GEO for the prices outlined in the previous posts, you can also launch 10,000kg to EML1 for even less.  Below is a visual of the Earth-Moon transportation energies (at Delta-V Scale).  It highlights how close GEO is to EML1 (and the moon for that matter) based on energy needed to get there.



Earth-Moon Transportation Energies at Delta-V Scale.
Used with permission from Brad Blair of the Colorado School of Mines.


Earth Moon Lagrange Point One (EML1) would make a interesting location for a space station and Bigelow’s Inflatable Sundancer module has a mass of 8,618kg – too large to be launched to L1 (or GEO) on an existing launcher (including Delta-IV Heavy) which top out a little over 6,000kg, but with the Falcon/tug transfer system described in these posts, a Bigelow Sundancer module could be launched from the earth's surface to EML1 for between $145-191M:

Since each station may consist of multiple Sundancer modules, some EML1 assembly may still be required.  But multiple missions to EML1 amortizes the fixed costs over more missions and could lower the price further.
Here are my Assumptions:

• Tug is launched on Falcon 9 with a dry mass of 3,000kg.
• Tug is co-manifested on a Falcon 9. Launch cost $20M.
• Tug Development paid for under contract and not a part of this analysis.
• Tug Manufacturing Costs: $50M.
• Tug refuels itself in LEO as needed between missions from additional Falcon 9 launches (10,000 kg of prop for $50M: $5,000 per kg)
• Tug lasts five years with amortization factored into price.
• Tug breakeven price listed in this analysis.
• Two missions per year assumed (but could be a mix of L1 and GEO missions).
• Operating Cost per year: $10M.
• LEO to EML1: 3800 m/s of delta-v required.
• EML1 to LEO with aerobraking: 1000 m/s of delta-v required (Note: this link indicates the EML1 to LEO trip could be performed for as little 770m/s.  1000m/s has been used for conservatism).
• Use aerobraking from L1 to LEO
• Bigelow Sundancer launched to LEO on a Falcon 9.

Observations:
1. Since propellant cost drives the price for this venture, true price reductions come not from increasing demand but from:

• Decreasing propellant usage [could be solved through advances in engine technology (VASIMR)] or 
• Paying less than $5,000 per KG for propellant [could be solved through extraterrestrial sources of propellant? Or SpaceX lowering their Falcon 9 prices due to added reusability in their first stage].

2. Once in EML1, could the tug make more money after dropping off its payload and prior to returning to LEO – what uses would you have for a tug in EML1?

• By delivering the first Station to EML1, a market is created for resupply missions.  A separate analysis would need to be done on the best way to resupply this station, but a Falcon/tug scenario should definitely be one of the options to consider for the resupply missions as well
• With L1's close proximity to the moon, what fun reasons could their be for diverting the tug occasionally (once in EML1) for lunar purposes.

3. Entrepreneurs reading this would want to calculate desired IRR to determine attractiveness of opportunity to investors. I have only considered a breakeven price.
4. Because SpaceX’s Falcon 9 becomes much more attractive for Comsat operators and for Bigelow when including a tug, SpaceX may be interested in being involved in a commercial tug venture.
5. There are going to be some elements of this analysis I get wrong. Assume I made mistakes. I welcome the corrections.


LOX/Kerosene Tug – Bigelow Sundancer to EML1 Details:

LOX/Hydrogen Tug – Bigelow Sundancer to EML1 Details:

Click here to play with the interactive spreadsheets for all three posts (in one file).

With these three posts I highlighted ways to launch comsats cheaper and larger than on a Delta IV-Heavy and to new and valuable destinations.  But LEO-to-GEO transfer tugs aren't the only way. 

One friend reviewing this analysis prior to posting was quick to mention the value of simply refueling the upper stages in LEO and bypassing the need for a LEO-to-GEO tug all-together (but needs a propellant depot instead). 

Which idea will blossom first?  The most profitable one (and the lucky one...but mostly profit).  Good luck entrepreneurs.

LEO-to-GEO Tug Part 2: Bigger than a Delta-IV Heavy

3,000kg DirecTV 12 Sat

In my last post, I showed the potential of using SpaceX’s Falcon 9 to launch a comsat to LEO and use a reusable LEO-to-GEO transfer tug to move the satellite from low earth orbit to GEO. I also described the largest satellite we can currently put into GEO in a single launch would be a 6,276kg satellite launched on a Delta-IV Heavy for $200M.

But how large of a GEO satellite would be possible using the Falcon 9/Transfer Tug architecture? And how expensive would that satellite be to launch?

Such a Falcon/tug system could launch a 10,000 kg satellite (an increase of ~59% over the current maximum comsat size) into GEO for $171-235M. The price/KG savings is significant ranging from 26-46% over the Delta-IV Heavy. In addition to cost/KG savings, no other commercial launcher can lift 10,000kg to GEO.

Here are my Assumptions:

• Tug is launched on Falcon 9 with a dry mass of 3,000kg.
• Tug is co-manifested on a Falcon 9. Launch cost $20M.
• Tug Development paid for under contract and not a part of this analysis.
• Tug Manufacturing Costs: $50M
• Tug refuels itself as needed in LEO from additional Falcon 9 launches (10,000 kg of prop for $50M: $5,000 per kg).
• Tug lasts five years with amortization factored into price.
• Tug breakeven price listed in this analysis.
• Two missions per year assumed (8% Market Share).
• Operating Cost per year: $10M.
• LEO to GEO: 4200 m/s of delta-v required.
• GEO to LEO (with aerobraking): 1500 m/s of delta-v required.
• Use aerobraking from GEO to LEO.
• Satellite launched to LEO on a Falcon 9.

LOX/Kerosene Tug – 10,000kg to GEO details:

LOX/Hydrogen Tug 10,000kg to GEO Details:

Click here to play with the interactive spreadsheets.

In Part 3 of this series, I will discuss if a Falcon/Tug system could be used to take a Bigelow Sundancer Module to EML1.

LEO-to-GEO Tug Part 1: Cheaper than a Delta-IV Heavy

Delta-IV Heavy

In response to recent blog posts about LEO tugs servicing Iridium’s satellite constellation, readers have been asking me about other uses for orbital tugs.

One tug use that keeps coming up in our discussions is a LEO to GEO transfer tug. Such a tug would pick up a payload in LEO and transfer the payload to GEO, drop the payload off in the correct orbit, and return to LEO for its next payload.

Although there are some intriguing propulsion technologies on the horizon that make the case for such a tug easier to close, could a transfer tug be developed today with today’ s propellants to serve the extreme ends of the GEO Satellite market (projected for the next decade to be 20-25 satellites per year)?  I focused my analysis on two GEO market segments:

1. Smallsats (550kg) and 
2. Mega ComSats (6,000-10,000kg)

So I did some analysis (yay, spreadsheets!).

With current propulsion, could a LEO to GEO transfer tug work for: 

• SmallSats? NO, a LEO to GEO transfer tug could not be operated for less than the cost and performance of existing EELV rides
• Mega ComSats? MAYBE: and the rest of this post discusses my analysis as to why an entrepreneur may find a market here.

Currently the largest GEO ComSat could theoretically have a mass of 6,276kg if launched on a Delta IV Heavy (correct me if I am missing a commercial rocket offering a larger BOL value for a GEO sat). I have heard of prices for this type of launcher ranging from $150-200M (maybe more). Since such a satellite in my example would push the boundaries of the capabilities of the Delta IV Heavy, I used the upper end price point of $200M to GEO.

I am assuming a commercial customer with a 6,276kg satellite could purchase a GEO ride on a Delta-IV Heavy for $200M. My analysis considered how to transport a 6,276kg satellite from the earth’s surface to GEO for less than $200M. 

The Falcon 9 has a LEO payload limit of 10,450kg.  My analysis assumes a Falcon 9 to launch the satellite to LEO and tug to take the satellite from LEO to GEO.  I considered two propellant options for the transfer tug:

1. LOX/Kerosene at 340 ISP
2. LOX/Hydrogen at 450 ISP

The table below shows the price comparison between the baselined Delta-IV and a Falcon 9/tug combo using both propellant options. 

The Falcon 9 & LOX/Hydrogen tug combo could deliver the satellite to GEO for only $142M (a cost savings of ~30%). The LOX/Kero tug at a lower ISP shows a cost savings of 6% (more if the launch costs end up being more than $200M). I am not sure 6% cost savings would overcome the risk of introducing a tug into the satellite-to-GEO equation, but 30% savings for the LOX/Hydrogen tug ($60M!!) seems pretty tempting.


Here are my Assumptions:

• Tug is launched on Falcon 9 with a dry mass of 3,000kg.
• Tug is co-manifested on a Falcon 9. Launch cost $20M.
• Tug development paid for under contract and not a part of this analysis.
• Tug manufacturing Costs: $50M.
• Tug refuels itself as needed in LEO from additional Falcon 9 launches (10,000 kg of prop for $50M: $5,000 per kg).
• Tug lasts five years with amortization factored into price.
• Tug breakeven price listed in this analysis.
• Two missions per year assumed (8% Market Share).
• Operating Cost per year: $10M.
• LEO to GEO: 4200 m/s of delta-v required.
• GEO to LEO (with aerobraking): 1500 m/s of delta-v required.
• Use aerobraking from GEO to LEO.
• Satellite launched to LEO on a Falcon 9.

Observations:

1. Since propellant cost drives the price for this venture, true price reductions come not from increasing demand but from:

• Decreasing propellant usage [could be solved through advances in engine technology (VASIMR)] or
• Paying less than $5,000 per KG for propellant [could be solved through extraterrestrial sources of propellant? Or SpaceX lowering their Falcon 9 prices due to added reusability in their first stage].

2. Once in GEO, could the tug make more money after dropping off its payload and prior to returning to LEO? Two thoughts:

• Who would pay for prox-ops work in GEO?
• What could the tug bring back from GEO to LEO (the delta-v to return to LEO from GEO is very low with aerobraking making return payloads comparatively cheap)? Who would pay to have a payload brought back?

3. Entrepreneurs reading this would want to calculate desired IRR to determine attractiveness of opportunity to investors. I have only considered a breakeven price.
4. The Delta-IV Heavy does not fly very often. This Falcon 9/Tug solution offers increased flight opportunities in addition to the cost savings already mentioned – frequent launch opps alone may make this venture valuable to customers.
5. Because SpaceX’s Falcon 9 becomes much more attractive for Mega ComSat operators when including a tug, SpaceX may be interested in being involved in a commercial tug venture.
6. There are going to be some elements of this analysis I get wrong. Assume I made mistakes. I welcome the corrections.

LOX/Kerosene Tug Details:

LOX/Hydrogen Tug Details:

Click here to play with the interactive spreadsheets.

In the next post in this series, I will walk through the math for a 10,000kg satellite to GEO (bigger than anything currently in GEO), and the numbers look even better – all from a Falcon 9 and a transfer tug!

Servicing Iridium's Satellite Constellation: Business Case (Part 3)

In my last post, I described Part 1 of a business case for a tug service for LEO satellites.  In my post I described how Jon Goff and I had come to the conclusion that Iridium may make a powerful first customer for such a tug service. 

Jon Goff now has Part 2 of this Iridium Tug business case posted on his blog, Selenian Boondocks. 

Jon not only provides additional arguments for the value of Iridium as a first customer, but delivers a compelling argument for why an entrepreneur may want to consider pursuing such a service, and why Iridium might want to listen if they do. 

Additionally, call it perfect timing (too arrogant to call it a response to our post?), this spacenews article came out yesterday describing Iridium's belief their fleets CAN make it to 2017 (3X) design life.  A few interesting nuggets from the report (and my commentary):

• Fleet deemed “viable” with only 36 satellites (but Iridium did not describe what viable means).  Viable must mean less than optimal or they would have only launched 36 sats to begin with.  If fleet is productive with only 36 satellites, there may be even more value in selling the current fleet upon successful transition to NEXT.  This give Iridium a more "robust" constellation to offer to a buyer.
• Iridium says, "Now, once every couple of weeks we do a maneuver” to avoid orbital debris.  How much debris mitigation maneuvers was factored when calculating the hydrazine needed to make it to 2017?  How much is life shortened if maneuvers increase?
• Fleet can survive on current fuel until 2017 (and if there are launch delays beyond 2017?)
• 114kg of hydrazine on board each satellite (back in 1997 when they were first launched)

Good luck Iridium.  If you want a heck of a backup plan, read Jon's post on Part 2 of the Iridium Business Case.  Thanks Jon for your work on this.

Servicing Iridium's Satellite Constellation: Business Case (Part 1)

1970's Marshall Space Tug Concept

I have been working with Jon Goff over at Selenian Boondocks on this analysis for about a year.  A couple months ago he started getting real busy.

I wanted to get our ideas posted while the effort was still fairly fresh in my head.  Thanks Jon!  Maybe when you are not so busy we could work on this some more.


Would Iridium pay for an orbital tug to service its current LEO constellation? But why would Iridium even want servicing when they are launching a new constellation?

Why would Iridium Pay?
Iridium provides satellite communication through a network of sixty-six active LEO satellites (with a few spares). Iridium’s satellites are based on a common bus design, the LM-700. Their fleet is spread across six orbital planes.

For you non-engineers like me, think of orbital planes as the paths these sixty-six satellites take around the earth. These six paths are spread out enough to cover the majority of the earth’s surface with several satellites in each plane. This allows Iridium phone calls to be “handed off” from one satellite to another as the satellites revolve around the earth. Here are Iridium’s financial and customer stats for 2009:

• 370K customers
• $320M in Revenues
• $135M in profits (EBITDA)

Iridium has secured funding to launch a new satellite constellation, Iridium NEXT. They intend to begin launching these satellites on SpaceX launch vehicles starting in 2015. Total cost: $2.9B.

Iridium’s current fleet had a designed operating life of 5-8 years. I will use a seven-year design life for my calculations. With initial launches in 1997, Iridium’s current fleet is aprox. 13 years old; by 2015 their fleet will be 18 years old, 2.5 times their designed life.

Iridium’s replacement constellation, Iridium NEXT, is not scheduled to start launching until 2015, however choosing a contractor to build this constellation was delayed from Spring 2009 to Summer 2010. Although Iridium has not formally announced a launch date slip, I believe such a delay is likely. Such a delay would push the start of constellation replacement from 2015 to 2016 or perhaps even 2017/2018. If NEXT were delayed to 2018, Iridium’s current fleet would be 21 years old (3x design life) at the time of replacement.

Iridium's current fleet is getting old! The two most likely systems to fail on the current constellation will probably be hydrazine for station keeping and/or batteries. Hydrazine is the fuel in many attitude control thrusters keeping the satellite pointed in the right direction and incidentally, this is also the fuel used to avoid space debris. Batteries supplement the solar panels.

And what happens to Iridium’s service if satellites do fail? Since Iridium still has a few reserve satellites already in orbit, Iridium would move these reserve satellites to take the place of the failing ones. Users may experience temporary service disruption during the maneuvers. If more satellites fail than Iridium has in reserves, users would experience more spotty coverage, more dropped calls, etc. due to the more permanent gaps.

At least half of Iridium’s revenue stream comes from commercial calling cards purchased and used by the minute. Unlike most terrestrial cellular phone providers, Iridium does not charge commercial customers a monthly rate for pre-defined number of minutes. This means if Iridium starts have satellites fail from lack of hydrazine, they will begin to have gaps in their coverage area. Such gaps will have an immediate impact on Iridium’s revenue.

Without coverage, customers can’t use minutes on their calling cards. If they can’t use up current minutes, they don’t need purchase new calling cards. All this means lost revenue and reputation for Iridium.

Jon and I disagree on whether battery life extension is possible for the LM-700.

But could a tug service be offered to provide a few kilograms of additional hydrazine to each of Iridium’s current fleet? Could a tug service provide deorbiting services for malfunctioning satellites? Could a tug service provide prox-ops inspection services? For the rest of this post, I will refer to such offerings as “servicing”.

Benefits of Servicing:

• Avoid revenue loss due to loss of service
• Avoid reputation loss due to loss of service
• Preserve customer base so $2.9B invested in Iridium NEXT is not sunk cost
• Provide new life for a fleet of satellites that may be able to continue to serve alongside NEXT (for this to be true, a market must be identified for this added capacity)
• Create a sellable product – the current fleet could be sold to a third party once NEXT is in operation
• Avoid damage to operational satellites in either fleet (current/NEXT) by deorbiting malfunctioning satellites
• Once NEXT is in orbit, actuaries within Iridium may advise the company to deorbit the current fleet (3x design life, remember) before they run out of hydrazine and make a mess of LEO, because servicing can deorbit a satellite for Iridium, servicing allows the current fleet to stay aloft longer – increasing revenue (and keeping actuaries happy)!

Risk of Servicing:

• Act of servicing may cause damage to current fleet reducing revenue, reputation, and putting NEXT at risk
• Cost of servicing may exceed benefits when risk is considered
• Reputation damage from trying servicing and having it be ineffective in some way (even with no damage to current fleet) – space is so visible in the media. Any perceived "failure" by the media could play poorly on Wall Street. Iridium is publicly traded (IRDM).
• Small window of opportunity. If NEXT launches on time (beginning in 2015), servicing may need be performed prior to that (service window grows if NEXT is delayed to 2018).
• Risk of the unknown/unproven: Service would be new. It is hard being the commercial guinea pigs for something – just ask all of you who were forced to use Windows VISTA.

To service such a market commercially, you would need to prove your technical solution could:

• Rendezvous and Dock with the LM-700 satellite bus
• Refill hydrazine tanks that were never meant to be refilled in orbit (bring your scissors)
• Develop a method to deliver 5-20kg of hydrazine to each of sixty-six Iridium satellites. That is 330-1320kg of hydrazine!
• Service sixty-six satellites over 6 planes (remember delta-V to change planes quickly is expensive)
• And many other complexities

Why would Iridium be a great first customer?

• Iridium is desperate (or I forecast will become desperate very soon as satellites start breaking). Would they invest $100M to preserve a $2.9B investment in Iridium NEXT.
• Iridium has money ($135M in profits in 2009)
• Iridium is in LEO (making the tug servicing technical solution less complex – reduced latencies, etc.)
• Iridium has felt the pain of debris impacts
• Iridium has a ground tracking station a tug service could piggy-back off of

Sounds fun! When do we get started?

[UPDATE: Jon just posted Part 2 up on his blog.]