• Implement the chosen method. While that management technique [Higginbotham, 1990] may appear simple, for the high technology, international, legal, innovative aspects and global political environment of a program like the Space Solar Power Program, risk management can be very complex. The first step, identification of potential risks, should be done at all levels of the relating project. Quantitative actuarial approaches have been developed by insurance companies to evaluate risks associated with different events, but these do not necessarily apply in the case of the Space Solar Power Program because it is unique (no statistics available), it has little homogeneity with past projects and the concepts have not been tried yet. Considering those factors, assessments based on combination of empirical results, engineering and projects management experience, past tests results and margins of performance and errors will be established [Barret, 1990]. There are essentially four basic ways to handle risks: avoidance, reduction, transfer, or retention. Unique to the Space Solar Power Program, the approach selected is to identify elements which could be considered as major “show-stoppers” from a financial point of view. Considering those identified risks, the sections 11.2.4 and 11.2.5 of this chapter will try to observe their potential impacts on the expected results for the Space Solar Power Program . The assumptions under which that analysis have been formulated are as follows: • The Space to Earth demonstration case and what follows will be considered; • The Space to Earth demonstration is a platform beaming electricity to Antarctica; • Private funds will not be utilized before a successful space to Earth demonstration. Based on discussions with members of specific specialist groups associated with this report, six categories of risks have been identified and will have to be considered seriously to give confidence to the potential investors. Risks relative to market, management, political, environmental aspects, technical aspects, and general risks have been identified, and will now be detailed. Market Risk The first risk category relates to the energy market. Relating to the energy which will be produced by the Space Solar Power Program systems, two major factors can be identified as major risks to be considered by potential investors: cost of production and the state of the technology necessary. As discussed in Chapter 3, the energy market can be analyzed in three phases: near, mid and long term. Considering the near term market, space to space activities studied relates essentially to beaming of energy to communication and Earth observation satellites. Potential market related to that type of activity seems to be limited in the near term considering the unreliability and maturity of the existing technology (assuming that no modification would be made to the satellite) and the high cost associated with this type of activity. Other near term activities for which market seem to be highly risky and difficult to evaluate consist of new fields of space to space activities such as beaming of energy to space stations or free flyer platforms. Relative to the mid term market, major space to earth applications to which a risk factor can be associated relate to four specific aspects: remote locations with developed energy demand, locations with little power capacity, power relay from one place to another and supply of electricity to networks to fulfill peak power demand. Each of those markets contains a potential show-stopper . Reliability of energy availability to remote locations market will have to be demonstrated. The developing countries market shows a serious lack of funds to purchase the supplied electricity. Technology associated with the power relay has to be developed, and reliability of beaming to electrical networks during peak power demand has yet to be proven. So, mid term potential market risks are essentially associated with a lack of reliable technology. Finally, the long term market shows a lot of possibilities for the Space Solar Power Program energy to be utilized. However, regarding the industrial and domestic energy demand, it is again dependent on the cost effectiveness of power supply and reliability of supply systems. The improvement of technology is a milestone that must be reached in order to realize a cost competitive systems These issues will be discussed in the technical section. Management Risk Two major potential risks associated with international space project management are considered by investors, delay in project completion and underestimation of realization costs.
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