viable, but the salvage value of the SPS satellite in this use would not equal the cost savings afforded since the availability of the SPS satellite would enable this mission, not merely benefit it. Accordingly estimates of salvage value for these uses would be highly speculative and are not included here. 4.8 Continued Use An obvious potential use of a 30 year old SPS satellite is to simply continue to use it as an SPS satellite. Since the satellite would be fully depreciated at this time, its continued use would provide, in essence, a salvage value. The only thing which would prevent a satellite from obtaining salvage value from continued use would be if there is a wearout failure mode for the satellite which occurs shortly after it has been in use for 30 years. If, on the other hand, the satellite degrades exponentially with time at a rate 5 then the net salvage value (net of disposal costs at the end of its economic life) is approximately given by the following equation: where Egis the beginning-of-life energy produced by the satellite per year, r is the revenue generated in mills/kWh, t is system age when salvaged in years, Cq^ is the annual operation and maintenance cost, C^ is the disposal cost and p is the discount rate. T is the satellite age at the end of its economic life (when revenues equal marginal operating costs): For typical values of these parameters, Figure 4.1 shows the continued-use SPS salvage value. Clearly, for degradation rates between 0 and 2 percent, this salvage use produces a considerable salvage value at t = 30 years. It is also clear, however,
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