Making ITS pay for itself
Few days ago we have witnessed a historic moment in spaceflight. After economically unsuccessful Space Shuttle re-usability failure, almost forty years later, a private company has self-funded development of reusable booster. And unlike STS, it actually reduces the cost of individual mission.
Falcon 9, even in completely expendable configuration, is already the cheapest option in its class. With first stage reuse, it will bring initial discount of 20% to almost 50% in the next few years. Fairing reuse (around 10% of the LV cost) and eventual second stage reuse plus lower range costs from its "private" launch facility could bring the order of magnitude price reduction in the next ten years.
There are around 70 space launches every year. These cost reductions will probably not affect number of rocket launches per year significantly. On one side we have slow downward trend of government satellite missions and commercial geostationary satellites. Number of ISS missions is pretty steady, but it faces inevitable funding risks after ISS retirement. Commercial space stations are always 10 years in the future and depend on large anchor customers (such as NASA). Smallsat/cubesat opportunities are greatly limited with ride-sharing. The only upcoming opportunity to enhance number of rocket launches are massive LEO/MEO constellations, but it is obvious that most of them will not realize. O3b and OneWeb have such a leading start, that any "fast follower" will have to use completely different business model to justify buildup cost.
Since SpaceX has already taken most of the available launch market, it is not likely they can grow its launch business much. Reuse will cover competition with smaller and cheaper launchers (Vega, PSLV, Pegasus), even competing even with Rocket Labs Electron. On the upper end, Falcon Heavy will easily cover most of high-energy missions. But even with that, SpaceX cannot sustain launch rate of 40+ launches per year, or up to 2 billion per year. Even without any competition and clear 20% profit margin, that leaves 400 million USD per year for the development of ITS. And there are lot of fixed costs that other companies do not have - such as ASDS flotilla, refurnishmet factories, rocket storage.
Latest post-launch press conference revealed that SpaceX runs ITS development on shoestring budget. It has Dragon 2, lunar mission, Red Dragon, fairing recovery support, Brownsville, LC-40 buildup and possible second stage recovery projects. That is a lot of R&D and capital investment cost even without ITS. And this mega-machine can easily bankrupt the company. So the real question is how to recover this huge investment cost as soon as possible. Most would agree that ITS is technically possible and achievable with current technology. But can a company of SpaceX size afford its development? And even if it is developed, how can test it properly and support flotilla of ITS going to Mars and back?
InternetX constellation proposed earlier represents an interesting project, but is huge investment risk, which dwarfs even Tesla Gigafactory and Model 3 (and Tesla will reach more than 10 billion USD in sales this year). BFR/ITS are so huge, that there is no obvious commercial payload that would use it. Its payload of 450 tonnes to LEO is simply too large for any currently viable space project. But in IAEA presentation, while Elon Musk was showing ITS on Mars, Europa and near the rings of Saturn, one thing was left out. ITS design is, by itself, capable of Single Stage to Orbit (SSTO).
From purely commercial perspective, using upper stage (ITS) as SSTO is feasible, but a bad business decision. F9 and Falcon Heavy are already here. F9 meets ITS LEO capability. They will be partially or even fully reusable. No rational businessman would invest into development of ITS like SSTO instead of perfecting F9 architecture.
But Elon Musk looks beyond GEO. ITS needs to use Raptors just like BFR. It needs to be able to lift itself from Martian gravity well and flat surface. It needs to be capable or aerobraking in Earth atmosphere and land back on Earth. And SpaceX must perform multiple testing before they even think of sending ITS to Mars and back. They cannot afford sending people on the first or second flight like SLS/Orion. And they must do all that testing on a shoestring budget. So here is an idea: why not use ITS test flights to launch satellites? Or even...Cargo Dragons?
That way, Raptors, ITS frame, heat shield, GNC would get precious real flight experience and validation. There would be less staging events, less fairing separation events, less engines involved, less engine restarts compared to typical F9 or Falcon Heavy mission. Missions would not require launch tower or Transporter/Erector/Launcher. Each landing would go straight to the launch site, without a need for nautical flotilla needed for GTO launches. So despite needing four times more fuel, ITS mission could become cheaper than reusable F9 mission.
But what about GTO and high energy missions? ITS obviously cannot reach them without additional stages or refueling. But it has another ace in its sleeve - huge cargo space that can several times larger than current fairings. That will enable launching satellites and in-space tugs using solar electric propulsion with much higher thrust levels compared to PV panels available today. SEP enabled satellites took around four to six months to propel itself from GTO to GEO orbit. But with order of magnitude larger PV panels, they could easily achieve the same from LEO in shorter time frame. And especially with HTS satellites, available power while in station becomes very important factor. With ITS, LEO becomes a viable staging point, which is very convenient since it enables 2nd stage to use SEP as more efficient propulsion.
After proving ITS as satellite launcher, next step would be to use it as SSTO replacement of F9/Dragon 2. This is risky move, since it is not clear whether it would be possible to have escape pod during its flight. Thus it would probably meet resistance from main Crew Dragon customer (NASA). But if allowed, it would expand ITS capabilities with ISS docking and ECLSS. From that point, ITS SSTO variants could effectively replace more and more Falcon missions, until the point where it would be ready for retirement. Or even better, the whole F9/Dragon infrastructure could be sold to other launch provider that would use it to support vital US government missions for the decades to come.
In this story, I have not even mentioned BFR. Such missions would be quite rare, and BFR might use "refurnished" Raptors at the end of their usable life. Also initial ITS for Mars would be a "refurnished" ITS at the end of its usable life on Earth, that would be used as initial habitat on Mars and never return. This way an envisioned city on Mars would essentially become ITS scrapyard, that would be loaded with functional equipment and ECLSS systems. From business perspective, most of ITS value would be amortized until this moment. Only a small amount of Martian ships would be "brand new" and capable of returning people back to Earth, since it is expected that more people will get to Mars than to leave it once a colony is established.
Using this approach, SpaceX can use commercial missions to provide payoff for ITS development and manufacturing even before launching first Mars ITS mission, and use ITS as the basic architecture to effectively replace and retire Falcon/Dragon architecture. They have done it before with Falcon reusability development. It is likely they will use the same pattern for ITS.
Falcon 9, even in completely expendable configuration, is already the cheapest option in its class. With first stage reuse, it will bring initial discount of 20% to almost 50% in the next few years. Fairing reuse (around 10% of the LV cost) and eventual second stage reuse plus lower range costs from its "private" launch facility could bring the order of magnitude price reduction in the next ten years.
There are around 70 space launches every year. These cost reductions will probably not affect number of rocket launches per year significantly. On one side we have slow downward trend of government satellite missions and commercial geostationary satellites. Number of ISS missions is pretty steady, but it faces inevitable funding risks after ISS retirement. Commercial space stations are always 10 years in the future and depend on large anchor customers (such as NASA). Smallsat/cubesat opportunities are greatly limited with ride-sharing. The only upcoming opportunity to enhance number of rocket launches are massive LEO/MEO constellations, but it is obvious that most of them will not realize. O3b and OneWeb have such a leading start, that any "fast follower" will have to use completely different business model to justify buildup cost.
Since SpaceX has already taken most of the available launch market, it is not likely they can grow its launch business much. Reuse will cover competition with smaller and cheaper launchers (Vega, PSLV, Pegasus), even competing even with Rocket Labs Electron. On the upper end, Falcon Heavy will easily cover most of high-energy missions. But even with that, SpaceX cannot sustain launch rate of 40+ launches per year, or up to 2 billion per year. Even without any competition and clear 20% profit margin, that leaves 400 million USD per year for the development of ITS. And there are lot of fixed costs that other companies do not have - such as ASDS flotilla, refurnishmet factories, rocket storage.
Latest post-launch press conference revealed that SpaceX runs ITS development on shoestring budget. It has Dragon 2, lunar mission, Red Dragon, fairing recovery support, Brownsville, LC-40 buildup and possible second stage recovery projects. That is a lot of R&D and capital investment cost even without ITS. And this mega-machine can easily bankrupt the company. So the real question is how to recover this huge investment cost as soon as possible. Most would agree that ITS is technically possible and achievable with current technology. But can a company of SpaceX size afford its development? And even if it is developed, how can test it properly and support flotilla of ITS going to Mars and back?
InternetX constellation proposed earlier represents an interesting project, but is huge investment risk, which dwarfs even Tesla Gigafactory and Model 3 (and Tesla will reach more than 10 billion USD in sales this year). BFR/ITS are so huge, that there is no obvious commercial payload that would use it. Its payload of 450 tonnes to LEO is simply too large for any currently viable space project. But in IAEA presentation, while Elon Musk was showing ITS on Mars, Europa and near the rings of Saturn, one thing was left out. ITS design is, by itself, capable of Single Stage to Orbit (SSTO).
From purely commercial perspective, using upper stage (ITS) as SSTO is feasible, but a bad business decision. F9 and Falcon Heavy are already here. F9 meets ITS LEO capability. They will be partially or even fully reusable. No rational businessman would invest into development of ITS like SSTO instead of perfecting F9 architecture.
But Elon Musk looks beyond GEO. ITS needs to use Raptors just like BFR. It needs to be able to lift itself from Martian gravity well and flat surface. It needs to be capable or aerobraking in Earth atmosphere and land back on Earth. And SpaceX must perform multiple testing before they even think of sending ITS to Mars and back. They cannot afford sending people on the first or second flight like SLS/Orion. And they must do all that testing on a shoestring budget. So here is an idea: why not use ITS test flights to launch satellites? Or even...Cargo Dragons?
That way, Raptors, ITS frame, heat shield, GNC would get precious real flight experience and validation. There would be less staging events, less fairing separation events, less engines involved, less engine restarts compared to typical F9 or Falcon Heavy mission. Missions would not require launch tower or Transporter/Erector/Launcher. Each landing would go straight to the launch site, without a need for nautical flotilla needed for GTO launches. So despite needing four times more fuel, ITS mission could become cheaper than reusable F9 mission.
But what about GTO and high energy missions? ITS obviously cannot reach them without additional stages or refueling. But it has another ace in its sleeve - huge cargo space that can several times larger than current fairings. That will enable launching satellites and in-space tugs using solar electric propulsion with much higher thrust levels compared to PV panels available today. SEP enabled satellites took around four to six months to propel itself from GTO to GEO orbit. But with order of magnitude larger PV panels, they could easily achieve the same from LEO in shorter time frame. And especially with HTS satellites, available power while in station becomes very important factor. With ITS, LEO becomes a viable staging point, which is very convenient since it enables 2nd stage to use SEP as more efficient propulsion.
After proving ITS as satellite launcher, next step would be to use it as SSTO replacement of F9/Dragon 2. This is risky move, since it is not clear whether it would be possible to have escape pod during its flight. Thus it would probably meet resistance from main Crew Dragon customer (NASA). But if allowed, it would expand ITS capabilities with ISS docking and ECLSS. From that point, ITS SSTO variants could effectively replace more and more Falcon missions, until the point where it would be ready for retirement. Or even better, the whole F9/Dragon infrastructure could be sold to other launch provider that would use it to support vital US government missions for the decades to come.
In this story, I have not even mentioned BFR. Such missions would be quite rare, and BFR might use "refurnished" Raptors at the end of their usable life. Also initial ITS for Mars would be a "refurnished" ITS at the end of its usable life on Earth, that would be used as initial habitat on Mars and never return. This way an envisioned city on Mars would essentially become ITS scrapyard, that would be loaded with functional equipment and ECLSS systems. From business perspective, most of ITS value would be amortized until this moment. Only a small amount of Martian ships would be "brand new" and capable of returning people back to Earth, since it is expected that more people will get to Mars than to leave it once a colony is established.
Using this approach, SpaceX can use commercial missions to provide payoff for ITS development and manufacturing even before launching first Mars ITS mission, and use ITS as the basic architecture to effectively replace and retire Falcon/Dragon architecture. They have done it before with Falcon reusability development. It is likely they will use the same pattern for ITS.
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