Flexible Design Opportunities in Small-Satellites Launch Infrastructures

The emergence of new small launchers for 100–250 kg satellite payloads makes the case for new space launch complexes that can support the future growing demand for launches of satellite constellations. However, development timeline and architecture of new launchers, as well as launch demand, are uncertain. Therefore, there is great uncertainty about the economic viability of any specific design for the development of new launch infrastructure projects. This study demonstrates how flexible design of the launch facility can increase the financial feasibility of new launch infrastructure projects. We do this by comparing the economic performance of fixed and flexible designs, considering uncertainties about the type of launchers that will succeed on the markets, their development time, and the launch demand. The infrastructure is hypothetically located in Europe, where there is a high uncertainty about the future emergence of new launchers. The fixed, inflexible designs involve upfront decisions to realize launches using a single propellant (solid, liquid, or hybrid). The flexible design invests only in a minimal set of initial flexible facilities that can support various propellants, while holding the option to add later propellant-specific infrastructure. The economic analysis applies Monte Carlo simulation to a spreadsheet of the discounted cash flows of revenues and expenses over the life to the project. This leads to estimates of the distribution of both Expected Net Present Value (ENPV) and the 5% Value at Risk (VAR) of the project. The results show that the flexible design has the highest VAR, because acquiring flexibility is costly as it requires to design after a superset of requirements; however, while all projects have a negative ENPV, the flexible design outperforms the inflexible designs on average, and dominates the inflexible designs if one considers the incentives of both the public and private parts in a hypothetical public-private partnership.