Artist’s rendition of satellites orbiting the Earth – rottenman/123RF Stock Photo
Last week saw some interesting developments for the UK Space Industry. Firstly, the European Space Agency’s (ESA) Industrial Policy Committee awarded contracts of €2.55 billion for the development of six new Copernicus satellite missions, with both Thales and Airbus being the big winners getting five of the six contracts between them. These were:
- Thales Alenia Space France will lead the development of the Copernicus Hyperspectral Imaging Mission (CHIME) with a contract of €455 million.
- Thales Alenia Space Italy will lead both:
- the development of the Copernicus Imaging Microwave Radiometer (CIMR) mission with a contract of €495 million; and
- the development of the L-band Synthetic Aperture Radar (ROSE-L) mission with a contract of €482 million
- Airbus Defence and Space Germany will lead the development of the Copernicus Polar Ice and Snow Topography Altimeter (CRISTAL) mission with a contract of €300 million
- Airbus Defence and Space Spain will lead the development of the Copernicus Land Surface Temperature Monitoring (LSTM) mission with a contract of €375 million.
- OHB-System Germany will lead the development of the Copernicus Anthropogenic Carbon Dioxide Monitoring (CO2M) mission with a contract of €445 million.
This outcome is very poor for the UK Space Industry who had played a significant role in the Copernicus programme to date and had hoped to play a role in this expansion. It was further disappointing that the level of sub-contracted roles for UK companies was over thirty per cent lower than had been expected. The UK Space Agency’s (UKSA) dismay at the outcome was shown as they abstained in the committee vote on the contracts.
Despite the UK Government and UKSA’s disappointment, the reality in the industry is different in that this was almost certainly accepted. The key issue is that Copernicus is funded by the European Union (EU), not ESA, and countries not part of the EU cannot be awarded the contracts. Whilst, technically as we are in the transition stage the UK could still bid for the contract, given the length of them, it was always unlikely that any UK company would get a prime contract. Equally, whilst we can be sub-contractors, unless the Government can agree “third country” membership of Copernicus at EU level in the current trade negotiations – which aren’t exactly going swimmingly – then UK sub-contractors may have to be dropped in 2021 irrespective of what was awarded this year. The uncertainty left a lasting issue on this round of bidding.
At last November’s Council at Ministerial Level, Space19+, the UKSA put forward €170m (£150m) to the new Copernicus R&D budget, 9.4% of the approximate €1.8bn budget. On the geo-return principle, we should have received the equivalent back in contracts, but the return is only 6.4%. There are still contracts on support activities to be awarded and some of this money may go to UK companies. However, this may be impacted by the outcome of the third country status and what it would cost to get into the programme and whether the UK Government feel it is worth paying.
Given that it was reported around the time of the Ministerial there was a move to pull the UK out of ESA altogether, there is more than a little concern that we could end up on the outside on the world’s largest Earth Observation programme.
Whilst all of this was going on last week, the UK Government did make a £400m investment into the recently bankrupt OneWeb satellite company as part of the recommended rescue package deal led by Indian company Bharti Global Limited. If approved, by the US regulatory authorities, when this goes through later this year the UK Government will own a significant equity stake in the company – potentially as high as 45%.
OneWeb has been one of the companies, along with SpaceX, focussing on providing space-enabled internet broadband. The Government press releases are emphasizing that this would help deliver the rural internet connectivity in this country and be a major sovereign global satellite network. Whilst all of this may be true, as is the fact that the OneWeb satellites and their associated radio spectrum licences and orbits are assets, there are also several other factors at play:
- The UK is being frozen out of the use of the EU Galileo navigation system, for similar reasons to Copernicus above, and they are talking that this could provide the UK with a shortcut to a navigation system. Although there are some valid points, technically, it would require completely different satellites to be launched and will still cost billions to get there and so it is unlikely to a cheap or quick fix. It is a bit like investing in a bike company, and saying that you want everyone to have a bike, but at the same time that you want to start building trains as they are both aspects of transportation.
- Around sixteen months ago, the UKSA invested £18 million into OneWeb to support its development.
- OneWeb’s satellites are made by Airbus, and this could guarantee both the company and manufacturing jobs in the UK.
This is a large investment in a fast-moving area of the industry and is a bit of a gamble. It is has received far from universal approval from within the industry with many suggesting the money could have achieved a better return on investment with several smaller projects. It is likely to be years, or even decades before we will know whether the Government was right.
