Increased competition will challenge ESA’s space authorityby Clemens Rumpf
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| ESA was successful in the old world where space funding was provided by governments, resulting in a stable foundation for European (and global) space activities. |
Some think that this division causes inefficiencies and increased overhead costs. The EU argues that all space activities should be conducted under the umbrella of the EU. The debate reached its height at the time of the ESA ministerial conference in 2012. At that time, ESA was able to broadly retain its position and autonomy. ESA’s impressive track record of conducting successful space missions; designing and producing one of the world’s most reliable launchers, the Ariane rocket family; and managing a European space industry that is competitive on a global scale certainly helped to reinforce ESA’s arguments. So is the debate thus settled? No.
ESA was successful in the old world where space funding was provided by governments, resulting in a stable foundation for European (and global) space activities. The money for the space industry was secure and did not encourage risk-taking in the development of new space technologies. As a result, the space landscape has not changed much in the last 30 years. Technological details may have improved, but nothing much changed in the big picture. With a few exceptions, such as electric propulsion, innovation was limited to increasing efficiency of existing technologies. Access to space remained expensive, satellites continued to be big boxes incorporating many sensors, and the components of spacecraft and rockets became little more advanced than those used in the Apollo era. Additionally, we are not palpably closer to go beyond Earth orbit than 30 years ago.
This environment meant that launcher industries around the world were utterly surprised by the rise of SpaceX. They were surprised because the need to evolve launcher technology by a giant leap was not apparent to them. SpaceX shows that technology has advanced sufficiently in the last 30 years to enable new, game changing approaches to space access. Why did none of the other launch providers even start to tap into this technological potential?
The answer is that they were too comfortable in their positions. They were not in an existential crisis because their launches were guaranteed by government contracts that do not encourage risk taking. And, unfortunately, they were right. It is not only the fault of the launcher industry, but also the lack of vision and leadership in politics that brought upon today’s situation.
The debate of who should be in charge of European space is not over. The surge of new players entering the space sector and an increasing amount of private funding is challenging the status quo. The new entrants are in the process of fundamentally changing how space has been done, and ESA will feel the heat of this change with increasing intensity over the next several years. The first signs of cracks in the foundation of ESA have already become apparent.
| GeoReturn is a major incentive for these nations to be a member of ESA. If GeoReturn does not exist, it is questionable if these countries want to continue to pay membership fees that benefit industries in more competitive countries. |
The geographical return, or “GeoReturn,” policy is a fundamental pillar of ESA’s structure. At the core of this concept is the desire of European nations to develop their high technology sectors and to engage in space activities. ESA member states pay a membership fee to ESA and get equivalently valued high-tech space contracts back to their industry as part of the GeoReturn agreement. This is the major incentive for smaller European countries to be a member of ESA. They don’t have the capability to bid for space contracts on a competitive basis but GeoReturn ensures their chance to win them none the less. In other words, GeoReturn does not aim to increase efficiency but has other goals, such as developing high-tech sectors in member nations.
This approach was feasible and successful in the old space world where governments were the primary funding body, which allowed for political motives, such as the preservation of jobs, to take precedence over performance. However, in a situation where the price gap for a given performance (say, a rocket launch) becomes sufficiently large, even governments cannot ignore efficiency considerations. In fact, today we are entering an era where efficiency becomes the primary driver for awarding space contracts because private investment makes up an increasing portion of the space economy. The established system is thrown off balance.
In an attempt to design the new Ariane 6 launcher to cost standards set by SpaceX’s Falcon 9 rocket, ESA has scrapped its fundamental principle of GeoReturn for the production of the new launcher. The significance of this step cannot be overstated. It is the realization that ESA has to draw every register, even altering one of its core principles, in hopes to maintain Europe’s competitiveness in space.
For now, the disregard of GeoReturn is limited to the, big but singular, launcher sector, and ESA would like to reinforce this impression. However, the decision to depart from GeoReturn was fuelled by increased competition in the launcher sector. What happens if competition increases significantly in other sectors, such as the satellite manufacturing industry?
Last month, news surfaced that Elon Musk, working with and funded by Google, want to create a constellation of about 4,000 small satellites to provide global Internet access. A new SpaceX factory dedicated to manufacturing satellites will be created as part of that effort. The Virgin Group, together with OneWeb, has similar ambitions. It is very likely that this development will challenge the next major sector in space: satellite manufacturing. It is easy to imagine that Europe’s satellite manufacturing industry will experience a shock similar to what the launcher industry is experiencing now. It is also possible that ESA will, again, try to increase efficiency by disregarding the GeoReturn principle.
How will the disregard of GeoReturn affect the desire of smaller European nations to be members of ESA in the long run? GeoReturn is a major incentive for these nations to be a member of ESA. If GeoReturn does not exist, it is questionable if these countries want to continue to pay membership fees that benefit industries in more competitive countries. A decline in the number of ESA members is the likely consequence. The very existence of ESA would be called into question.
The EU does not have this dilemma to begin with because contracts from the EU are awarded on a competitive basis. The EU therefore has a strong case to increase its authority in European space since its infrastructure is already set up to meet a competitive market.
| In the end, ESA could remain intact, but lose many of its responsibilities. |
But will GeoReturn really become obsolete? In all areas where commercial interests (for example Ariane and the European Data Relay System) are the primary incentive, this outcome is the most likely one. However, there are other areas where commercial considerations are not decisive. Science and exploration missions as well as human spaceflight are examples for such fields. These areas have a good chance to experience a continuation of the ESA principles because they strengthen Europe as a whole.
In the end, ESA could remain intact, but lose many of its responsibilities. By refocusing ESA on space science and human spaceflight, ESA has a strong case to reassert its raison d’être since ESA is already established in these fields, in contrast to the EU. A second option is to allow ESA to apply GeoReturn to some projects and disregard it for others. Thus, less competitive member nations could still hope to receive a return on their investment in ESA.
In 2016, the current agreement for cooperation between the EU and ESA expires. It remains to be seen what the new agreement will look like. The current signs point at a shift in power towards the EU.