All of the above risk areas will have to be managed carefully to ensure financial investor confidence in ISPO. These management issues need to be seriously addressed during the development of the ISPO, as its success will depend largely on it's ability to manage risk effectively. Financial source utilization for ISPO development A plan for the evolution of ISPO was presented in sections 11.2.3 and 11.2.4 of this report. This allows for a staged implementation of ISPO projects and effective use of financial sources an management of risk. The first two demonstration programs will not produce financial revenue and will therefore require institutional support to finance them. The 1 MW program will not generate substantial revenues compared to program cost but will show the business mechanism of supply and demand, while gaining public confidence in space to earth solar power supply. International institutional funds will have to utilized to finance this program. The 500 MW power generation program will generate substantial revenues. These will allow ISPO operation to be paid for and will constitute the first business venture. However the cost of implementing the space infrastructure will still have to be met by international institutional finance. This step will be crucial in showing large scale beamed power applications, eg city level supply, and gain public and energy utility confidence for this form of energy suply. The 5 GW power plants will provide revenues to pay for all operation and space infrastructure costs. The large amount of capital required for satellite development will have to be underwritten by international institutional finance, as the project will not break even for about 30 to 40 years, depending on the price for which energy can be sold. After this point large stable revenues are forecast, and operation will become highly profitable. Financial Viability The full financial viability of ISPO will only occur with the very large space power stations. This is due to the large revenues which must be generated to offset the high initial investment associated with establishing the required space infrastructure. The cost of capital will be crucial to the viability of large ISPO programs. This cost of capital will relect the price at which energy is sold. This in turn will affect the utilization of the solar power spacecraft and the total amount of revenue generated. It is estimated that a 3% ROI would provide a profitable venture if the cost of power increases to about USS 0.07 per kWh and the initial satellite development costs are covered by government finance which can be written off.
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