SPS Feasability Study SD76SA0239-2

Capital Investment Investment costs, as well as operations costs estimates, are summarized in Table 5.2-2 for their investment/operations cases. Case I is an example computation based on a four-satellite power system. A four-satellite power system was selected for use in an economic/financial assessment to illustrate that investment recovery (using cash flow analysis techniques) can occur when demand is constant and a one-time investment is assumed. Eventually, through profits and depreciation and amortization, the investment is recovered. Tables 5.2-3 through Table 5.2-5 and Figure 5.2-3 provide both a pictorial view of the investment recovery and the detail annual data computations for further comprehension of the summary results for Case I. Case II assumes a 120-satellite power system investment. The investment assumes a 16-percent annual operations cost is necessary to achieve the returns shown on Investment and Operation. Case III also assumes a 120-satellite power system investment. However, in this case, a 20-percent annual operations cost is assumed to be necessary in view of a potentially desirable higher return on investment and operations. These three cases provide a simple cost sensitivity comparison to be made based on the possibilities available through the annual operations cost areas. User Cost Projections User costs (costs/kwh) have been developed for each of the three cases discussed. The contributions to these costs in DDT&E, hardware and systems investment, and operations costs can be seen from the data shown in each of the three cases. In Case I, without DDT&E costs, the cost per kwh is 24 mills; in Case II, DDT&E costs were left in with the cost per kwh amounting to 27 mills; in Case 111, with DDT&E costs left in and the higher annual operations costs of 20-percent assumed, the cost per kwh would approach 34 mills per kwh. Representative transmission and distribution costs which should be added to these values lie between 5 and 8 mills. It is assumed, therefore, that representative user costs—in terms of 1976 dollars—would range between 30 and 50 miIls/kwh.