JPL report is indicated. "The curve P-P is used to parametrically estimate the DDT&E payback as a function of alternative electric generation costs. Its shape depends on the discount rate and the SSPS buildup rate. Its derivation is provided in Section III. "Were alternative generating systems' cost not to exceed 27 mills/ kWh—the SSPS estimate—DDT&E would not be repaid. Indeed, the function becomes asymptotic to the x-axis at about 31 mills/kWh, indicating that at least 4 mills/kWh difference between SSPS and terrestrial systems is required to payback the DDT&E (again, this presumes that the total DDT&E bill accrues to SSPS). "As indicated, were the alternative generation cost 35 mills/kWh— point A on the y-axis—the DDT&E would be repaid by CY 2012 with 57 5,000 megawatt operational SSPS units." Two aspects of this analysis and the conclusions drawn from it would seem to bear further investigation. First of all, the use of a 7.5 percent discount rate may significantly understate the full impact of DDT&E costs on unit costs. The relative impact of increasing the discount rate would be even greater for DDT&E costs than for capital charges, since DDT&E costs are incurred many years earlier than production and sales. With a higher discount rate the present value of the costs will be that much higher than the present value of the deferred recovery revenues. A second issue related to DDT&E cost recovery concern is which costs are to be recovered. More specifically, there is a real question, raised in several references, as to whether the entire DDT&E costs incurred to develop a Heavy Lift Launch Vehicle (HLLV) in order to drastically reduce the cost/lbm to LEO is properly chargeable to only the SSPS program. Obviously, the substantial cost reductions required for this program will benefit virtually all but the most minor space activities for whatever purpose they may be planned. To further explore these issues, an extended analysis of the impact of discount rate and DDT&E changes has been undertaken. The methodology employed in this analysis is taken from Appendix A of the ECON study which describes the computational process for: (1)
RkJQdWJsaXNoZXIy MTU5NjU0Mg==