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FRAMEWORK and OUTLOOK of the SPANISH SPACE SECTOR Alicia Richart Ramón, Mechanical Engineer N O L L I U G

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FRAMEWORK and OUTLOOK of the SPANISH SPACE SECTOR Alicia Richart Ramón, Mechanical Engineer N O L L I U G 21/10/2014 Nº 176 ECONOMICS FRAMEWORK AND OUTLOOK OF THE SPANISH SPACE SECTOR Alicia Richart Ramón, Mechanical Engineer N O L L I U G M J - G S C o e d i V e u q i t p O o t o h P / E C A P S E N A I R A - S E N C - A S E 2 1 0 2 © 1. The Importance of the Space Sector November 15, 2014 marks the 40th anniversary of the launch of the first Spanish satellite, with the sector facing a very worrying future. In these years, the Spanish re - search and space industry has managed to play an important role in the develop - ment of the European and global space sector. The Spain brand embarked on all European research missions of the universe, of solar system exploration, for exam - ple, Mercury, Venus, Mars, the Moon, Saturn, comet docking, and even on the Cu - riosity Rover, the most ambitious NASA mission to explore Mars. Our industry participated in important teams of the International Space Station and on ATVs for re - supply. It was also part of consortia which successfully competed in the commercial market for communications and Earth observation satellites and rocket launchers, all of them high-tech export activities of large international and economic implications for our country and for the prestige of our industry. The space sector today provides services worldwide without which our society would not operate properly: if satellites should be silenced, world economy would col - lapse. Developed countries ensure the proper functioning of these services for the wel - fare of its citizens and to protect their interests, and developing countries are implementing them to ensure their growth. However, the inter-ministerial meeting of the European Space Agency (ESA) of No - vember 2012 was held in a very serious situation due to the non-payment of manda - tory dues to the Agency by the previous government. This, coupled with the economic crisis, has forced the current government to reduce 75% of Spanish participation in optional programs, which has placed Spain in a very difficult situation in the ESA with serious problems for its industry. Spain, therefore, should recover the position it de - serves given its economic, technological and social level in Europe. 2 A country having space capacity has a key tool for the future, due to the follow - ing reasons: Engine of Growth Space systems provide ground services that improve the quality of life and se - curity of citizens, with a very positive effect on the economy of the countries which have them, creating wealth and generating jobs. The space sector is fo - cused on the civil, defence and trade industry. It comprises the design and man - ufacturing of launchers, communications satellites and Earth observation satellites. Political Tool Countries that have a Space Program have an important tool of international policy that, without major economic efforts, can provide significant results. The recent crisis in Crimea provides evidence of the importance of the space sec - tor in international conflicts. The economic and political sanctions that the US is applying to Russia, specifically exclude any action that could affect its coop - eration agreements on the International Space Station. This cooperation path remains open despite the crisis that these two countries are facing, preventing relations among them from breaking. G8 countries consider that the space sector is State policy; their political par - ties include it in their programs and it is part of the agenda in bilateral confer - ences. Bilateral space cooperation agreements between countries (France, Germany, Italy, and the UK with the USA) are constantly being signed. Environmental Protection Mechanism The Earth is set in an environment that is subject to physical phenomena caused by the sun, cosmic radiation, meteorites, asteroids, etc., the effects of which may have a great economic impact on power distribution systems and communica - tions, which could sometimes be appalling for our ecosystem and for human life. 3 Concerned about this situation, developed countries are taking steps to recog - nise, assess and monitor these phenomena trying to anticipate as far as possi - ble their effects through multinational programs such as 'Space Weather' or 'Space Situational Awareness' (SSA). The strength of a country is measured in - ternationally in terms of what it can contribute to this type of programs. Inexhaustible Source of Resources The future may hold transcendent discoveries for humanity related to energy and new materials. There are currently ongoing institutional and private initia - tives that are exploring our close space environment and trying to discover new resources through research programs. • New energy sources. In the interstellar space where the Earth is, there is a constant and massive flow of high-energy particles that could be used as en - ergy sources if we had the necessary technology. • Space mining. Meteorites made of metal compounds have recently been dis - covered, the properties of which are very different from those that can be found on Earth because their formation could have taken place in stars or in space conditions impossible to get on the Earth. The capture of asteroids to industrially use its compounds is an activity that is beginning to take shape with private initiatives in the USA. Space mining is yet in its infancy, but it could be an interesting economic activity in the future and will be exploited by those who have the appropriate means. We are thus before a strategic sector, as space activity affects the sovereignty, security and economy of a country. 4 2. Current Sector Situation in the World Globally, three distinct periods in the evolution of the sector can be distinguished. FIGURE 1. Space sector evolution Initial period 1957: launch of Sputnik It features a strong political motivation - 1972: last mission of the two superpowers, where companies to the Moon have everything they need to succeed. by Apollo 17 The goal was to win the space race. The industry develops easily and without financial problems. Industrial 1973 – 1999 Political interest declines significantly development and governments focus their efforts on consolidating the industry through important institutional projects, applying an active industrial policy based on mergers and acquisitions to get 'Champions' capable of facing international competition in this emerging market. Industry 1999 – 2012 Institutions start to grant prominence consolidation to the industry which is fighting hard in the commercial market. The crisis, which particularly affects institutional programs in developed countries, promotes the entry of new companies and emerging countries in the space market. Source: Prepared by the author 5 The space sector moves 195 billion euros worldwide. In response to market demand for services, the space sector is often divided between: • Institutional market: Defence and Civil Space applications. • Commercial market: Activity for the commercial exploitation of satellites and launchers. FIGURE 2. Value chain Space industry: Launchers M • Builds and launches the satellites A E 2,200 M € R • Operates satellites from the ground T S Satellites P • 20 companies compete in this global market. In U 2,400 M € Europe: Astrium, TAS, Arianespace. • They purchase and operate satellites Satellite Operators for communications, broadcasting, navigation… 14,000 M € • 50 companies worldwide. In Europe: SES, Eutelsat, Hispasat, Inmarsat… Terminal manufacturers: M A Equipment E R • Suppliers of equipment T Terminal Manufacturers S N 40,000 M € • 100 companies W O • VSAT, TVRO, Teleport… D Services: End Users Fixed and mobile services • Fixed and mobile 65,600 M € • Voice and data communication • TV broadcasting (55,000 M €) Source: Prepared by the author 6 Considering the value chain generated by the commercial activity, it is usually divided into: • Upstream. It is the actual space sector and includes the development, con - struction and launching of satellites. Technologically speaking, it is very de - manding and requires an investment of around 12% in R&D. The main area of research focuses on launchers and on geostationary satellites that will evolve to higher orbits. It is mainly comprised of suppliers of space subsystems, com - ponents, systems integrators, in addition to monitoring operations carried out from the ground. There are few companies involved worldwide in the upstream value chain and, therefore, it is where greater institutional investment takes place: 95% of institutional activity is done here. The pyramid shows how any in - vestment in upstream R&D has a multiplier effect of 3 on the next step of satel - lite operators, and of 6 in the equipments part. • Downstream . It refers to the commercial exploitation of terrestrial services pro - vided by satellites. It includes the operation, services and supply of commercial equipment to the end customer. It comprises the following strata: 1. Satellite operators. It is currently dominated by satellite TV suppliers that rent satellite 'transponders' and exploit LEO constellations dedicated to mobile communications. There are two satellite operating companies in Spain: His - pasat, for the commercial market, and Hisdesat for government applications. Worldwide, there are around fifty companies: SES, Inmarsat, etc. Perhaps the most significant example in this field is meteorological satellite observation, which is already part of our daily life and without which a modern society could not be conceived. 7 2. Terminal manufacturers. There are about a hundred companies that manu - facture ground stations for various uses (VSAT, TVRO, teleport, etc.). 3. End users. It is the key part of commercial exploitation. TV services (Direct to Home and Broadcasting) can be highlighted, which have grown significantly in recent years. Broadband use (Internet) is virtually non-existent at the moment. Expected growth in mobility services for both voice and especially data should not be forgotten. Providing access to the Internet and achieving 100% of high speed coverage (Broadband) is possible using satellite capacity.
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