IGS LOW COST ACCESS TO SPACE April 2016 TABLE OF CONTENTS Executive Summary 3 Market Overview 6 Background 6 Satellites 7 Science in space 14 Human spaceflight 17 Market Drivers 18 Small satellite market 19 Smallsat launch providers 22 Growth Potential 24 Opportunities for the UK 24 Conclusions 26 Recommendations 27 Co-ordination across the value chain 27 Establishing an operational spaceport 29 Appendix 31 Risks to smallsat market opportunity 31 Regulatory blockers 31 Report Author: Conor O’Sullivan, Satellite Applications Catapult COPYRIGHT Copyright © Satellite Applications Catapult Ltd 2016 THE COPYRIGHT IN THIS DOCUMENT IS THE PROPERTY OF SATELLITE APPLICATIONS CATAPULT Ltd. All rights reserved. No part of this documentation may be reproduced by any means in any material form (including photocopying or storing it in any electronic form) without the consent of the Copyright Owner, except in accordance with the Copyright, Designs and Patents Act, 1988, or under the terms of a license and/or confidentiality agreement issued by the Copyright Owner, Satellite Applications Catapult. Applications for the copyright owners’ permission to reproduce any part of this documentation should be addressed to, The Chief Executive Officer, Satellite Applications Catapult, Electron Building, Fermi Avenue, Harwell, Didcot, Oxfordshire, OX11 0QR, UK. 2 EXECUTIVE SUMMARY The UK’s satellite technologies, applications and intelligent space systems are exported across the world. This report focuses on the UK’s leading expertise in the small satellite market1, a growing segment of the space sector, for which low cost access to space is of significant importance. Small satellites are currently under-served when it comes to dedicated and timely launch opportunities, and addressing this issue is of particular relevance for the UK. Defined as the infrastructure and services required to enable the next generation of hardware to reach space at an affordable cost, low cost access to space includes satellite payload (the brain that will ensure the satellite does what it is meant to do) and spacecraft bus (the spacecraft platform) manufacturing, test, integration and launch facilities. The UK currently has world-leading capability in all parts of the satellite industry value chain, except launch. This makes it vulnerable to launch price and schedule changes from international partners and suppliers2 and poses an increasing risk to achieving the UK space sector’s ambitious growth targets. Small satellite-based missions and services are particularly at risk. Launch is expensive, it can typically account for a third to one half of the total cost of a small satellite mission. Uncertainty regarding schedule and price can seriously impact a business case and can be the deciding factor in concluding or losing an order.3 Reducing this uncertainty is particularly important for the UK’s small satellite manufacturing industry, which aims to provide competitive, integrated mission packages for satellite operators, together with the timely testing of new technologies. Debating the current lack of indigenous launch capability in 2015, the UK Space Propulsion Working Group4 found that: “A UK launch capability focused on small payloads will ensure small satellite operators are given the ability to launch without reliance upon the ad- hoc availability of spare capacity on large launch vehicles.”5 1 Defined here as those satellites with mass less than 500kg 2 Surrey Satellite Technology Ltd (2013) “Towards a UK launch infrastructure”. Unpublished study, part of the Space Collaborative Innovation Team Initiative (Space CITI) programme within the UK Space Agency’s National Space Technology Programme (NSTP) 3 Interview, April 2015, Surrey Satellite Technology Ltd 4 UK Space Propulsion Working Group (UKSPWG), an industry/academic body that is considering the technology and supply chain required for small satellite launch, in particular propulsion. 5 UK Space Propulsion Working Group (2015) “Increasing revenue growth is the UK space sector through development of a small satellite launch capability” Multiple Industry Contributors 3 Low cost access to space creates a real opportunity for a complete solution from the UK, spanning the entire satellite value chain - strengthening the small satellite industry, supporting the growth of manufacturers, propulsion providers enabling next generation of re- usable launchers including new propulsion capability such as SABRE from Reaction Engines, and advancing the downstream applications sector (Fig. 1). Additionally, indigenous capability upstream, including low cost launch, enables increasing value creation downstream in space-enabled applications and services. Applications and services are expected to account for over 90% of UK space industry revenues by 2030.6 Vertical integration is therefore key. FIG. 1. SATELLITE INDUSTRY VALUE CHAIN. SOURCE: SATELLITE APPLICATIONS CATAPULT (2015) The importance of securing upstream resources - satellites and ground supporting infrastructure - is evident in increasing commercial enterprise activities in this sector. Google, along with others such as Fidelity, invested almost $1 billion in launch vehicle provider SpaceX in 2015.7 Google also bought Skybox Imaging (renamed Terra Bella), a commercial high-resolution satellite analytics provider, for $500 million in 2014.8 6 Space Innovation and Growth Strategy 2014-2030, Space Growth Action Plan 7 http://blogs.wsj.com/digits/2015/01/21/spacexs-valuation-rockets-to-12-billion-with-google-investment/ 8 http://www.forbes.com/sites/ellenhuet/2014/06/10/google-buys-skybox-imaging-not-just-for-its- satellites/#4e8ce8bd425d 4 The number of small satellite constellations, which demand a cost- effective launch solution, is growing and low cost access to space allows new satellite companies to enter the market and to test new business models. With competitive launch prices from small satellite launch vehicles, a leading domestic satellite manufacturing industry and access to polar orbits (to which most small satellite, low earth orbit missions go), the UK is in prime position to capture a sizeable share of this burgeoning global market. To summarise, the key findings of this report are: Low cost access to space is fundamental to a growing small satellite industry: vertically integrated capability will complete the satellite industry value chain and create a unique advantage point. Low cost access to space is a key requirement for any major player in this sector, leading to increased economic benefits through satellite manufacturing, applications and services. An operational spaceport to support orbital access is a top priority: a spaceport will position the UK to take advantage of emerging demand for small satellite launch, commercial human spaceflight and microgravity research. Assuring timely and dedicated access to space will create an opportunity not just for the UK, but for Europe as a whole. As robust and resilient space assets and space based capabilities become increasingly significant for national security and defence, a UK launch site is likely to become a future strategic requirement. 5 MARKET OVERVIEW Background This report focuses on low cost access to space, identified as a priority market within the Space Innovation and Growth Strategy (IGS), and has been produced by the Satellite Applications Catapult, in partnership with the UK Space Agency. It is derived from a combination of meetings, workshops and interviews with key government and industry stakeholders and existing research. Central to the IGS is the goal of capturing 10% of the global space enabled market by 2030, taking the UK’s share of the revenue to £40bn and creating 100,000 new jobs. With this in mind, the subsequent Space Growth Action Plan identified forty growth markets relying on space technology or services (Fig. 2) and fifteen of these were judged to be priority markets for detailed review and subsequent action by government, industry and other stakeholders. FIG. 2. IGS PRIORITY MARKETS 6 The Space IGS 2013 report highlights current access to space as a barrier to growth for UK companies, as well as a commercial opportunity, and advocates short to medium term action if the UK is to host commercial spaceflight and small satellite launch. A national space launch infrastructure and domestic launch capability underpins IGS growth targets and is central to capitalising on both existing UK strengths in small satellite manufacturing and future demand for space tourism and microgravity research. Market projections indicate that low cost access to space from the UK would support and stimulate growth in these sectors. A seamless supply chain, with low costs and faster development cycles for satellite manufacturers, operators and launch providers, would also offer opportunities for commercial companies focusing on the downstream exploitation of satellite data. Satellites The UK is home to world-leading small satellite manufacturers, including Surrey Satellite Technology Ltd. (SSTL), and Clyde Space, as well as larger satellite producers including Airbus Defence and Space and Thales Alenia Space. The UK is thus well positioned to build on an established competitive advantage in the satellite manufacturing market and UK domestic satellite manufacturing stands to benefit from global growth in the sector. This upstream sector accounted for approximately 11%, or £1.2bn, of the total £11.3bn space industry turnover in 2012/13, according to the report, Size and Health of the UK’s Space Industry.