Space-Based Solar Power

a public discussion sponsored by the Space Frontier Foundation

The Business Case: An Ongoing Discussion

Posted by Coyote on August 10, 2007

One of the goals is to turn space solar power over to the commercial sector as soon as possible. This demands a business case that allows competitive pricing to the consumer for space-based solar power while creating sufficient profit motives for industry. One of our participants asked for the following:

“I want to ask for an separate and identified ongoing discussion of the business case on this web site. That section would need to include an evolving market and financial analysis models. It would be a kind of progress chart towards actually doing the deed.”

So here it is. Please take a look at the preceding thread regarding The Goal for 2050 and the Build Forward and use this to base your estimates.

My suspicion is that government will have to build the 5 MW and 10 MW class systems. This will prepare the industrial base and the resource train for the larger systems to come and this will significantly cut the commercial sector’s start-up costs. (How am I doing so far?) The tipping-point to the commercial sector will likely come when we move to field 1 GW size systems. However, some innovative corporation might step forward to begin investing sooner…thereby setting themselves up to capture the space-based solar power market early on.

Let’s hear from our finance and investment wizards!

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25 Responses to “The Business Case: An Ongoing Discussion”

  1. Coyote said

    FROM A WELL QUALIFIED SKEPTIC (whom we need to pay attention to):

    [A 5 MW system is infeasible, assuming microwave power beaming]

    It is because the geometry and optics laws dictate the minimum
    rectenna size (receiving array on the ground) needs to be a couple of
    kilometres in diameter.

    It is not practical to make it smaller than this.

    It is just plain silly to put a mere 5 MW into such a large a 10
    kilometre square area, simply makes no sense. The ideal beam
    intensity to use for the microwave is about 1 KW per square meter,
    when you multiply that by a few square kilometers you get several
    gigawatts.

    To reduce ground rectenna size means increasing the satellite transmit
    antenna even more, and that is already over a kilometer in diameter.

    A minimum sized microwave solar power satellite will cost about $100
    billion dollars and be capable of delivering several gigawatts.

    If you build the satellite the same size but reduce the power output
    to 5 MW, then the 5 MW will cost the same $100 billion, maybe shaving
    of a few million because you do not have as many klystron tubes, but
    really saves relatively little.

    What else could we do ?

    Well, if you try to reduce the ground rectenna size, say to a few
    hundred meters, then that will increase the satellite cost even more,
    say to $200 bilion.

    So you have two choices:

    1) Size the system to 5 MW at a cost of $200 billion

    2) Size the system to 5 GW at a cost of $100 billion.

  2. Dan Lantz said

    “Dinkin: What is the minimum money scale for a viable lunar solar power (LSP) project that would cost the same as Earth generated power?

    Criswell: When LSP approaches 100 gigawatts electricity (GWe) of capacity and has delivered in excess of 500 GWe years (GWe-y) of energy the LSP energy will drop below the cost of electric energy from conventional systems. This will likely require the order of $400 to $500 billion.”

    from

    http://www.thespacereview.com/article/355/1

  3. The “two choices” comment is silly – obviously you could build a 5 GW-sized system and just capture 0.1% of its power on the ground, and there you have a 5 MW system for slightly less money.

    But follow a cost-optimizing path from that point and you have many more options. Capturing 0.1% of the power that’s hitting a 10 km^2 area means a receiver of just 10,000 sq m. Suppose we’re happy with a receiver 100 times that size, 1 km^2. That means we can reduce the product of transmitter area and power transmitted by a factor of 100 – if both scale the same way then lets say we’re cutting it a factor of 10.

    So the new system has a 1 km^2 receiver and captures 1% of the power hitting the ground, which now covers 100 km^2 instead of 10 km^2, and the system in space is a factor of 10 smaller – 500 MW size, instead of 5 MW.

    Tweak the relative sizes as you wish to get the “optimal” 5 MW system – it’s going to be considerably less expensive than the 5 GW system.

    Yes, it’s going to waste a lot of power – but we’re looking at business case, cost optimization, not pure engineering efficiency.

    Another engineering route is to look at non-GEO satellites for this small-scale application. Just as navigation and communications satellites can and have been used in other orbits, so can power. Engineering efficiency is again lost simply because most of the time any one satellite is not in line-of-sight, but a small constellation could still be more cost-effective than one, and could provide the same power to multiple locations around the planet.

  4. Brian Wang said

    Werbos has mentioned in his presentations using electricity to lasers to beam power down.

    http://www.werbos.com/SSPTechBrief.htm

    High Power Fiber Lasers (HPFL) using photonic band gap materials for beaming energy to earth or space.

    There is great interest in laser-based “constellation” designs, which can be scaled up gradually as new lasers are added to a constellation, exploiting the ability of lasers to concentrate power into smaller areas on earth and thereby avoid the need to start out with a huge initial power station. New designs have been developed for high-power light-to-light lasers, which convert sunlight directly to laser light, avoiding the inefficiencies and heat loads of using electricity as an intermediate.

    Slide 36, 37 of this presentation mentions some ideas about “spinal cord laser”

    http://www.werbos.com/JTECSanitized.pdf

    http://www.nss.org/settlement/ssp/index.htm

    Spinal Cord Laser
    The “spinal cord laser” (initially called the “backbone laser”) is a design presented by Richard Fork (University of Alabama Huntsville) and Paul Werbos (National Science Foundation) at the September 2005 Technical Interchange Conference (TIC) hosted by the Ohio Aerospace Institute. In this design there is almost no flow of electricity at all in space. Lightweight mirrors concentrate light onto disks of semiconductor material, which are excited by sunlight in the same way that photovoltaics are excited. These disks also exhibit similar efficiencies and weight, but emit energy in the form of coherent light which can be beamed directly down to small receiving stations on Earth. The same laser can easily punch through clouds on cloudy days. Concentrator cells like Marzwell’s could be used to extract electricity on the ground. Because of the similarity to photovoltaic designs, and because we avoid the weight needed for electric power distribution (about half the weight of the SERT designs), it is reasonable to expect costs in the 10-20 cent range. One beauty of this design is that it can be tested and used at a much lower minimum power level than the SERT designs.

  5. Charles Miller said

    Coyote,

    I have done a first cut (ROM) financial analysis. I am sure that other financial wizards are doing the same, but are not sharing their work.

    My analysis (below) suggests that we are in the first-order ball-park for a business case that closes, after the technology risk has been retired. In summary, a commercial 5 MW system, that delivers power to the DOD in forward bases (like Iraq) at prices equivalent to what the DOD is currently paying, would generate $200 million per year, or more.

    ROM FINANCIAL ANALYSIS

    As has already been reported, the DOD is paying the equivalent of $300-800 per gallon for fuel delivered to Iraq. That is NOT electricity.

    I asked Lt. Col. Hornitschek how much electricity that generates.

    GREEN HORNET: “Let me see what I can find out. A gallon of JP8 has about 40kWhr of stored energy, which would be the absolute maximum. Then you start chipping away for conversion losses, etc and I’d be surprised if you can even extract a half or a quarter of that as useful electrical energy. Let me see if I can’t get you some specific numbers.”

    Thus, the THEORETICAL MINIMUM that the DOD is paying for electricity in Iraq, at bases that are the end of this long supply chain, is $7.5-20 per kwh.

    If the generators are 50% efficient, it is $15-40 per kwh. If the generators are 25% efficient, it is $30-80 per kwh.

    That is two to three orders of magnitude more per kwh than we pay for in our homes ($0.05-0.10 per kwh).

    From a business/financial perspective, we have a range of $15-80 per kwh that the DOD is paying for electricity at forward bases in Iraq. If a SBSP energy supplier were to give the DOD a price of $15 per kwh, (plus the priceless benefit of ALL the saved lives of American men & women, who would have died delivering the fuel), you can roughly calculate revenues of the 5 MW space-based energy delivery system.

    First, 5MW is the power on orbit. Jay Penn has suggested that there 30% efficiency is achievable for end-to-end transmission efficiency. That is 1.5MW continuous on the ground.

    Next, there are 8760 hours per year. If you assume 98% uptime (2% in shadows), that is 8585 hours of power delivered at 1.5 MW.

    or 12.877 MILLION kwh delivered per year.

    at $15 per kwh that is $189 Million revenue per year.

    at $80 per kwh that is $1 Billion in revenue per year.

    I am assuming that the DOD likes the lower end of the spectrum much more.

    For just one operational 5 MW power system. If the service provider starts building these systems in series, pretty soon we are talking about real money.

    The next issue is how much it will cost to build these systems in orbit. We still need to do that work.

    Personally, I believe we are in the neighborhood of closing the business case. If the DOD is willing to pay $1B per year, the case probably closes using existing LVs. Assuming the DOD wants to pay on the lower end of the spectrum, we probably need much lower cost launch (reusable spaceplanes). A national investment in spaceplanes will deliver one more benefit to our nation. Other recommended policies that would lower the cost per kwh to the DOD are investment tax credits (for companies investing in this high risk industry), tax holidays (Zero G, Zero Tax), and access to low cost debt (in the form loan guarantees on the demand side, after the technology has been proven.)

    I think we are close.

    – Charles

  6. Edawg said

    I think using lunar material for ssp is the way to go for a couple of reasons

    1. We are going back to the moon and who wants to discard that giant expensive CEV program?Throw in a couple of NTR tugs and BAM! We have the ability to do WHATEVER we want in cis-lunar space (Mars anyone?)

    2.We also can use lunar platinum for hydrogen fuel cells.Two birds with one stone.This doubles the nations pay off in the end.

  7. Coyote said

    Charles (Chazmanian Devil): Very cool analysis.

    Edawg: The long term plan is, of course, to build SBSP systems on the Moon and move them to GEO. I hope the second generation of SBSP satellites will be made on the Moon. Until the Moon is ready to supply, we are pressing forward with boosting Earth materials up to get the job started

  8. Christine said

    The next issue is how much it will cost to build these systems in orbit. We still need to do that work.

    I’d also check how much it would cost to deploy those panels on the ground. Think light and flexible thin film panels either sewn into tents or unrolled and draped onto a roof. Installation would take about ten minutes.

    This seems to me to be a lot cheaper than building a 1km^2+ rectenna.

  9. This seems to me to be a lot cheaper than building a 1km^2+ rectenna.

    It is.

  10. Coyote said

    Christine: We are already doing that and do not have enough surface ares to run even a single air conditioner to cool the tent. Forward bases are never large enough for massive ground-based solar fields–expanded even further to collect enough power to store in batteries to carry the load through the night and weather. Such bases will likely use maser or laser receivers which are reasonably sized, so as to avoid the large rectenna fields. A couple of these download sites would likely be assembled in a forward base area to avoid the single point of failure.

    Kirk: You are right. Today any other energy source is cheaper than space-based solar power, if only because space-based solar power doesn’t exist, among a mountain of other detractors. Start-up costs are massive. It will take years to recoup the lay-out. But keep in mind that today the competition for energy among the major powers is only starting to heat up. Energy competition is assessed as the most likely driver towards war among the major powers, and we do not have enough energy development programs underway to catch the trend. We are behind the power curve. Also, the international and domestic communities increasingly demand that we make a major shift away from carbon-based fuels. We are 100% supporters of ground-based solar, wind, and nuclear energy. From an energy security standpoint, we want as many clean energy eggs in our basket as possible, not just the cheapest sources, but also sources with unique niche attributes. Our interest in space-based solar power is partly because it fills the gaps in ground-based solar and wind due to darkness and weather, as well as it allowing us to redirect that power anywhere in view to the satellite (within a optimum footprint window). Is the business case easy? No, if it were it would be done already. Are we rushing this effort? No, look at our timeline…we are considering 2035-2050 as the timeframe when the business case closes and private industry can field SBSP systems. Good comments. Thanks

  11. Joe Russo said

    Hello

    In analyzing the topics, one question keeps surfacing.

    What is the proof that the use of lunar resource will reduce the $ per kwh to the point that it competes with current energy production?

  12. Dan Lantz said

    Joe # 11:
    See Dan # 2 above. While not “proof”, it is based upon self-funded plan. Now that much of R & D is comming from NASA/Mars supproting Moon base, and Coyote is willing to pay BIG bucks for initial supply, initial investment may be much lower. 100 GWe system is where profit and/or undercutting other supply options sets in, not first delivery. Using surface of Moon as resource as well as material of Moon as resource is key to plan.

  13. While not “proof”, it is based upon self-funded plan.

    You’re joking, right? Self-funded? That’s about as convincing as cold fusion.

    If you are going to pin your hopes on the entire SBSP business case being viable because of the VSE and Moon/Mars/Beyond actually surviving to completion, you are betting against both political history, NASA history, and the realities of the US financial system.

  14. allen said

    > That’s about as convincing as cold fusion.

    Not the best choice of metaphor to invoke if ridicule is your goal. The little Mason jars just keep chugging away producing anomalous heat even as the experiments have gotten increasingly sophisticated in the control of experimental error.

    Cold fusion aside, any business case that doesn’t include the assumption of ridiculous increases in computing power to be brought on by Moore’s Law is incomplete and valueless. Looking at the shockingly rapid pace of development in AI and robotics I have to wonder how far in the future a real life, first generation “replicator” is? A year? Five?

    What’s the business case when you assume zero launch, labor and manufacturing costs?

  15. Dan Lantz said

    Allen #14:

    It is “traditional” to set base plan with currrently proven or well understood materials/technologies. This makes comparison with other plans more accurate, and provides a buffer to unexpected problems, as advances are expected. As advances are made, they can be plugged into the base plan without changing everything at once. I’m ready to go ASAP! Shubbar #13 seems to miss that this is what is happening now that NASA/Moon/Mars has joined the lunar effort, and will help pre-existing base LSP/Criswell plan, which is “self-funded” by plowing revenue into further construction. Profits start in quite early, with 1/200th of the 20,000GW system completed (100GW). Investing $500 billion to eventually capture $trillions/year energy market not bad idea! The more above “market” early users are willing to pay to get what they want, the sooner it gets going.

    http://www.thespacereview.com/article/355/1

  16. shubber said

    What’s the business case when you assume zero launch, labor and manufacturing costs?

    Something you’ll find in the “fiction” section at Barnes and Noble…

  17. Edawg said

    shubber is dead on

    I want a direct connect.To many endless canyons with dark shadows..

    ~beep beep

  18. Joe Russo said

    Hello

    In case no one has noted the related story about gas and oil pipelines in Mexico City.

    http://www.foxnews.com/story/0,2933,296239,00.html

    “…MEXICO CITY — Mexican gas and oil pipelines were attacked in six places before dawn Monday, causing explosions, fires and gas leaks that forced the evacuation of thousands of people.
    The blasts reverberated for miles. No direct injuries were reported, although civil defense agencies said two women in their 70s who lived nearby died of heart attacks shortly afterward…”

  19. David Hewitt said

    There may be something to consider in the business case discussion that I have recently been thinking about. First of all, you need to be able to utilize your SSP network in an efficient and profitable manner. The more I think about it, the more I am starting to believe that GEO based SSP is a pipe dream in the near term. I remember some articles about high earth orbiting constellations of smaller SSP platforms than would be required for GEO. If you were to launch a constellation that would orbit in a high altitude/high inclination pattern similar to GPS, you could have a network of small ground stations all around the world. You could have an international co-op that each local substation would be a part of. If you joined the network, all you would need to do is have a ground station that could lock on to beamed power from multiple satellites. Then you could store excess electricity in batteries and capacitors for night time use and distribute it into the power grid of your local municipality. The whole network could be funded by fees payed into the co-op by every user. This may not be an original idea on my part, but I think it is the most logical business case for a near term operation scenario for SSP.

  20. Michelle Mause said

    While the point of this discussion, and this whole area, is FOR Space Based Power – – does anyone have a case AGAINST SBSP ?

    > I have a story I’ll submit in a few days if anyone expresses interest.

  21. Edawg said

    one major problem with closing the business case INSURANCE!!!!!I hate to see the geico rates for anything that involves high explosives

  22. Neil Cox said

    The beam optimum intensity to use for the microwave or laser is ABOUT 1 KW per square meter at the rectenna or energy receiving site. Higher intensity is better for emergency and battle field as we likely will not use the beam unless we shrink the mass and area of the energy reciever. Shrinking is much easier using the lasers as they will focus into a narrower beam.
    Lower beam intensity is better for crowded communities of people you care about, if you can afford the land the energy receiver occupies. Again, if you don’t build the energy receiver because you tried to make it too safe, all of us may face a horrible future at the hands of radical extremists and/or see our beach front property flooded most of the time.
    When you multiply 1000 watts per square meter by a few square kilometers you get several gigawatts. Neil

  23. Neil Cox said

    More cut, paste and edit:
    To reduce ground rectenna size means increasing the satellite transmit antenna even more, and that is already over a kilometer in diameter for 2.55 gigahertz. Considerably smaller is practical at up to 300 gigahertz = one millimeter wave length.

    Another engineering route is to look at non-GEO satellites for this small-scale application. Just as navigation and communications satellites can and have been used in other orbits, so can power. Engineering efficiency is lost simply because most of the time any one satellite is not in line-of-sight, but a small constellation could still be more cost-effective than one, and could provide the same power to multiple locations around the planet.

  24. Alienthe said

    @Michelle Mause #20

    While the point of this discussion, and this whole area, is FOR Space Based Power – – does anyone have a case AGAINST SBSP ?

    > I have a story I’ll submit in a few days if anyone expresses interest.

    My only reservation is that increasing talks on Peak Oil, groundwater depletion, climatic changes would mean that forms of Space Power would by some be seen as the beginning of an hydraulic empire

    Countries that fear forceful use of such power (probably countries that themselves would not mind wielding large scale destructive powers over others) might object loudly.

    If the power system is in the hand of someone who gets intoxicated by power might pull an Enron style strategy with rolling blackouts and destruction of other satellites. Even a low power beam might fry satellites (like those of a competitor) since these are not designed to resist microwave warfare.

    Some fear the downlink power beam as a destructive beam of Biblical proportions. Those of us who are familiar with microwaves know that power setting well below “deep fry” can be dangerous. Microwaves can cause blindness. Apparently this has been tested in the Irak-Iran wars years ago.

    More sneaking use would be an even lower power level that causes sterility in men, an occupational hazard those in the know are rather aware of when working on microwaves. A hostile use of this would be to raster the beam across an area. Noone would be likely to notice immediately but 9 months hence rampaging unemployed midwives would be the the least of your problems.

    For good or for evil controlled injection of heat in the form of microwaves might steer hurricanes.

    This involves a lot of power of corrupting potentials and one should think very carefully about who should be allowed to wield such powers, not only for the real dangers but also for the fear that naturally comes.

  25. Fred333 said

    Great article. I really had not read much about the whole turning it over to the private sector, but I understand why.

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