Space: Will Europe Strike Back? Three Questions to Arthur Sauzay
By Institut Montaigne
On December 11th, the President of the United States signed Space Policy Directive 1, instructing NASA to send humans back to the moon. On December 15th, SpaceX launched a Falcon 9 rocket with two reused components, on a resupply mission to the International Space Station. And China has launched twice as many rockets as Europe this year. Arthur Sauzay, author of Institut Montaigne’s latest policy paper entitled Space: Will Europe Strike Back?, answers our questions on these transformations that the global space sector is undergoing.
What is the current state of the space sector? Who are the main actors?
Space is undergoing major transformations, generally described as “New space”. As the price of access to space falls and new technologies emerge, the private sector is becoming the major driver for increased space activities. This represents a crucial evolution since the previous era of Sputnik, Apollo and the International Space Station, which were all funded and managed by States.
Of course, governments remain today the largest players and are still the most important source of funding and space activities. Thanks to new players from the internet sector, which are investing billions of dollars in the space industry, the US operated a strong comeback in the last ten years and remain the world leader. Russia, which played a historic role in the conquest of space (first satellite, first human in space), is currently experiencing setbacks and has not managed to keep up. The new player is definitely China. The country has managed to master the basic building blocks of space (launchers, autonomous manned flight) and is already leader in some areas, such as space-based quantum telecommunications. China now intends to play a leading role, with the objective of overcoming the US in space before 2050. India is far behind but has strong ambitions too. And other countries, including Australia and Portugal, are establishing national space agencies.
Europe’s position in this new space race, which is analyzed in detail in my policy paper for Institut Montaigne, is somewhat peculiar. It has launchers (Ariane, Vega) and has managed to secure a large share of commercial launches - launches awarded after a tender procedure, which account for about a quarter of all launches. It has an autonomous GPS called Galileo, more precise than its American counterpart. It has large companies active in space (Airbus Defence & Space, Thales Alenia Space, etc.). However, Europe’s investment in space is limited, especially compared to that of the US, and it has no autonomous manned flight capabilities.
This public sector dominance is however changing rapidly. Current transformations triggered by new private companies such as SpaceX (Elon Musk) and Blue Origin (Jeff Bezos, founder of Amazon) are only the tip of the iceberg. The space sector is expected to grow from US$ 260 billion this year - the revenue having already doubled since 2007 - to somewhere between US$ 1,500 and US$ 2,000 billion in the next 25 years. This growth will be driven largely by private investment and activity, not governments. This is enabled by falling prices of access to space, technological advances (in particular for smaller, cheaper satellites), the increased need for data and internet, as well as the huge financial capabilities of American (GAFAs) or Chinese (Tencent, Alibaba) tech giants, many of which are investing in the space sector.
The newest players are space startups: hundreds of startups are now proposing new products and services related to space. In 2016 alone, three billion dollars were invested in these companies. However, so far, American startups have been the main beneficiaries of these funds and they are growing rapidly. Europe, even though it harbours many promising young companies and space entrepreneurs, is lagging far behind.
What is reusability? How is it challenging the space industry?
Ever since rockets were invented, they have always been discarded after a single use, even though building one costs over €10 million. The reason for this standard is that to reach Earth orbit, they need to accelerate to about 25,000 km/h (25 times the speed of a commercial jetliner) which requires a lot of energy. In order to be recovered, the launcher has to be slowed down and then brought back to the ground. It is then important to make sure that the launcher can fly again with limited costs compared to the price of building a new one. This was thought to be almost impossible. The US Space Shuttle - which was withdrawn in 2011 - was designed to be partly reusable but its cost was very high, and it was dangerous.
The result of expandable rockets is that access to space is extremely expensive: several thousands of euros for a single kilo in orbit. Very high costs have been a major hurdle preventing the expansion of human activities in space. This is not a surprise. Imagine if an A380 plane flying from Paris to Sydney was discarded after a single flight. Tickets would only be accessible to millionaires!
Elon Musk must be given credit for his major achievements regarding reusable rockets. After creating SpaceX in 2002, using money he earned by selling his shares in PayPal, he oversaw the design of the Falcon 9 rocket as a reusable launcher. He has also reshaped the way rockets are built, using methods borrowed from the car industry in order to lower costs. Supported and partly funded by NASA, SpaceX has managed to recover and reuse the first stage - the lower part of the rocket which contains rocket engines, avionics and fuel tanks - of the Falcon 9 rocket. Such an achievement requires a number of technologies (reusable and throttleable engines, autonomous guidance systems, etc.), for the first stage to slow down, go through Earth’s atmosphere and then land upright, either at sea (on a barge) or on land.
Reusability is still in its infancy from an economic standpoint but it is now widely accepted that it will change the equation in the space sector. Prices - which have already fallen with increased competition from SpaceX - are expected to fall rapidly in the coming years. The official goal of Elon Musk and Jeff Bezos (who is developing a similar rocket) is for the price per kilo to be divided by 10 or more over the next 15 years.
This is a major achievement for access to space but it is also a major challenge for existing competitors. In the US, ULA (a historic company now jointly owned by Boeing and Lockheed Martin) is struggling to keep up and their future survival is questioned.
Europe’s Arianespace has reacted by developing a successor to its very successful Ariane 5 rocket, called Ariane 6. It has also reorganized its industrial process and supply chain, aiming at lowering launch prices by about 40% compared to Ariane 5. This should be enough compared to the cheapest current prices, but it could be insufficient if reusability leads to even lower prices in the 2020s. Furthermore, while China has recently announced plans to develop reusable rockets as early as 2020, Europe’s efforts to master the technology required for reusability are not sufficient. There is no clear plan to mitigate risks if reusable rockets win the game in the 2020s. This is a very risky strategy.
What plan of action should Europe adopt to respond to these new challenges and keep up with the space race?
For a long time, Europe has managed to achieve a lot with comparatively little resources, narrow ambitions and limited coordination among the various players (ESA, EU and governments). When is the last time we have seen EU leaders deliver an ambitious speech about space?
Unless it sets itself new goals and reorganizes its space policy, Europe will struggle to be among tomorrow’s space leaders. This is a serious problem because in addition to economic consequences, Europe’s sovereignty will be challenged. Conversely, if Europe reacts quickly and asserts its ambition, it has all the ingredients needed to be at the table with the US and China. This however requires a major overhaul of Europe’s space policy and sector.
First, Europe must secure an independent and competitive access to space for the next 20 years. This requires getting Ariane 6 ready even sooner than expected, as well as - and this is crucial - mastering technologies required for cheaper, reusable launchers, not in 2025 or 2030 as currently planned, but a lot sooner (for instance 2021-2022).
Second, Europe’s space governance must be transformed. The EU must become the leading political body, and coordination with ESA must be much more efficient - possibly by transforming ESA into an EU agency. Simultaneously, Europe’s public space budgets must be increased from €10 billion today to at least €15, possibly €20 billion. This new ambition must be reflected in EU’s 2021-2027 multiannual financial framework (MFF).
Third, these efforts must lead to increased private investment and the emergence of new private players. The private sector is the major source of investment and innovation for New space. Higher space ambitions and public budgets are necessary but Europe will not be able to compete on this matter: the US spends around $50 billion a year in the space sector (including by the military). To maximise efficiency of European taxpayers’ money, innovative tools such as public-private partnerships must be used. They have been key to SpaceX and reusability’s success, through NASA’s COTS program. Europe must determine what it needs in space and then incentivize the private sector to invest, innovate and deliver. As a cutting-edge sector, New space will be the source of new tools for many fields, from optical fibre manufacturing to 3-D printing. And of course, much is to be learned from further exploration of the solar system, and also from more Earth observation in the context of rapid climate change.