Feasibility Study for a Commercial Space Station in Low Earth Orbit

Abstract

Space exploration demands innovative solutions. Currently, this sector is financially driven by governmental agencies with the support of industry partners. However, a paradigm shift will be observed with the planned de-orbiting of the International Space Station (ISS). The National Aeronautics and Space Administration (NASA) spends $3.1 billion on ISS operations. Nevertheless, as per the ISS Transition Report 2022, switching to a self-sustaining Commercial Space Station (CSS) in Low Earth Orbit (LEO) could save the agency approximately $1.8 billion annually by 2033. This figure is derived from the difference between NASA's current ISS operational costs and the projected costs of utilizing a CSS. These savings could allow room for industry growth and create new global opportunities for human space exploration while enabling governmental agencies to refocus on upcoming lunar missions.NASA's expected contribution to CSS development costs is estimated to be a portion of the overall development costs, with the rest likely coming from private investments and other funding sources. NASA's investment in the CSS development can be considered a sunk cost, as it may not be repaid directly but is expected to generate returns on investment through savings on operational costs and by fostering growth in the space industry.Upcoming stations like Orbital Reef, Axiom Station, and Starlab cater to diverse customers and offer prospects for scientific research, in-space manufacturing, space tourism, creative industries and education. However, research is necessary to ensure their financial viability. This study aims to evaluate a CSS’s financial and economic feasibility, focusing on potential new businesses and how to achieve a self-sustaining business park in space. This assessment encompasses analyzing costs, funding sources, market and competitor trends, business models, and revenue streams while focusing on legal, political, and cultural factors.Our findings reveal that space-based research will likely be LEO’s most significant revenue generator within the decade, thanks to existing government grants and contracts. NASA's $1.8 billion annual expenditure on LEO activities could meet its requirements for research, technology development, and training. However, potential implications may arise if this expenditure proves insufficient. In such cases, NASA might need to reevaluate its budget allocation, seek additional funding, or collaborate more extensively with private entities to ensure its LEO requirements are met. A shortfall in expenditure could potentially impact the pace of technology development and affect NASA's ability to conduct research and maintain its presence in LEO.According to Deloitte, space tourism could become the most profitable revenue stream at the beginning of the next decade, with an estimated annual revenue of up to $3.3 billion. Furthermore, once the industry overcomes technical challenges and the demand for in-space manufacturing becomes sufficient, it will likely become the primary revenue stream. Finally, our analysis reveals that fine arts, live events, TV Film, and STEAM (Science, Technology, Engineering, Arts, and Mathematics) education have the potential to generate $242 million as additional revenue streams. In conclusion, this study offers a roadmap of future business prospects and actionable recommendations outlining various activities, demands, and possibilities that can be carried out in a CSS. The report can serve as a general guideline for commercial space entities to leverage emerging prospects in the space industry. Moreover, this study can be a source for space agencies seeking to expand their activities and optimize their resources.