In a recent article from Peter B. de Selding, it was revealed that both the German and Spanish governments are against subsidizing launch startups in favor of allowing companies to compete for launch contracts. This was in response to France moving towards offering development subsidies to its launch startups in one form or another.
My response to this statement was that if given a choice, launch startups in those countries would likely jump at the chance to compete for launch contracts over subsidies. This sentiment was backed up by PLD Space CEO Raúl Torres, who commented on my post stating, “subsidies not only create stagnation but also poor competitiveness.”
But does it really need to be a choice? This is a drum that has been beaten over and over again, but there is already a near-perfect blueprint for this type of funding in the NASA Commercial Orbital Transportation Services (COTS) program.
COTS shifted the development burden away from the agency and put it squarely on the startups, while still offering financial support for that development. And the success of the program speaks for itself. The SpaceX Falcon 9 and Dragon system was developed with astonishing financial efficiency.
Today, Europe already subsidizes launch vehicle development. The Ariane and Vega programs have received funding for their increasingly large development costs. By current estimates, the development of the Ariane 6 launch system will cost contributing states approximately €3.8 billion.
The SpaceX Falcon 9, which Ariane 6 will compete with in the market, cost an estimated $300 million (€284 million) to develop. With this figure in mind, the €3.8 billion appears excessive. And yes, the larger Ariane 6 (the four booster variant) is more capable than Falcon 9, but it is also significantly more expensive at around €115 million as opposed to $70 million (€66.4 million) for a new Falcon 9.
It’s too late to turn around the Ariane 6 program, and with the recently announced Amazon deal, the vehicle’s future is all but guaranteed. However, what happens when we look past Ariane 6 into the 2030s? Do we begin envisioning Ariane 7? Or do reimagine European launch vehicle development.
In the next five years, companies like Isar Aerospace, Rocket Factory Augsburg, Skyrora, and Orbex will have operational microlaunchers and will likely be looking forward to a larger class of vehicles. I think it’s time to start looking to the future, imaging a program that will support those initiatives in much the same way as COTS did for SpaceX. So, what would that look like?
The proposal
If I were the ESA Director General, I’d propose a budget of approximately €1.5 billion for next-generation launch vehicle development. The budget would equate to three €500 million awards. Each development contract would outline a detailed roadmap, with portions of the funding released with the achievement of predefined milestones. The contracts would also guarantee a percentage of ESA launch contracts for a period of five years once each vehicle became operational as a further incentive.
Although a portion of ESA launch contracts would be guaranteed, effectively shutting out the competition, a percentage would also be left open for competitive bids to ensure privately-funded entities still had the ability to compete.
This isn’t a perfect solution. Competition is promoted, but it would be tightly controlled. Although privately-funded entities would still be able to compete, they would be at a significant disadvantage over the three companies selected to receive development contracts. There would also be no guarantees. It may be the case that all three developed effective vehicles. It may also be the case that none do. This is a level of uncertainty Europe has not faced before, and with €1.5 billion on the line, it would likely take some doing to convince member states of the proposal’s merits.
Despite this, I do believe that some kind of proposal along these same lines is an absolute necessity. Europe will need to take a risk or two over the next decade to ensure its rich heritage in space is grown rather than being forgotten to the tides of history.
I want to know what you think. Head over to this week’s discussion to have your say.
