The pandemic exposed the UK’s’ dependency on data beamed from satellites - data that enabled online working, meetings and even shopping. The global economy is increasingly reliant on satellites to help keep it running and a growing proportion of jobs and opportunities now depend on growth in the space sector. The sector could help power the COVID-19 recovery, enabling the UK to level-up and better compete in a post-Brexit global economy, but time is of the essence.
As newly appointed members to UKspace (the trade association of the British space industry) and providers of various construction services at Space Hub Sutherland and Prestwick Spaceport, G&T plans to publish a series of articles highlighting our deep involvement in this new but rapidly growing sector.
In this first article we look at why the UK wants to ‘do’ space, the business case for space and some of the regulatory challenges likely to be faced by operators within the UK’s space programme.
The UK doesn’t have what some would call an extensive history of rocketry or launching satellites into space, but it does have an early one. For example, British engineered fuel cells – ie power sources that utilise hydrogen and oxygen to produce water, heat and electricity – were integral to the Apollo 11 mission in 1969. Since then, several UK-based space companies have been established, building on the work of early space engineers.
While there is an abundance of expertise in developing and producing satellites, the UK lacks the experience of launching them from UK soil. But this is set to change. The UK has plans to become a global player in the space launch industry, joining other space-faring nations such as the USA and Russia.
Britain has not independently launched a satellite of its own since 1971, but in the past decade the UK space sector has more than trebled in size, with the Government encouraging its development through financial incentives (ie grants) and the introduction of new regulations. However, the Government wants to go further, establishing indigenous launch capability and aiming to capture a 10% share of the global small satellite launch market by 2030 so that it can become one of the most attractive places in Europe to launch satellites.
To reach this goal, the UK needs spaceports – launch operation sites from which small satellites can be launched into orbit. Across the UK, there are plans to invest in and develop a number of spaceports. Sutherland spaceport has paved the way, receiving the first green light and obtaining the legal right to build launch facilities at the site, but there are plans to facilitate the creation of additional space launch sites in Cornwall, Prestwick, the Western Isles, Machrihanish, the Shetlands and Wales. However, spaceport operator licences will need to be obtained from the Civil Aviation Authority (CAA) in order to actually launch from these sites - something which no UK spaceport has been granted yet.
The fact that there are seven proposed spaceport sites (or ‘space hubs’) seeking operator licences suggests that the UK isn’t content with being a “tier three” space nation.
Why the UK wants to ‘do’ space?
Commercial gain is a key driver. The income generated by both ‘downstream’ activities (eg direct to home broadcasting, satellite navigation etc.) and ‘upstream’ activities (eg space manufacturing, launch vehicles, payloads, scientific instruments etc.) is significant. Findings from the latest ‘Size and Health of the UK Space Industry’ report1 commissioned by the UK Space Agency and delivered by know.space revealed that income generated from the industry was £16.4bn in 2018/19 – the equivalent of 5.1% of the global space economy. Around 36% of this income was generated from abroad, with the vast majority of this coming from Europe (including the European Space Agency (ESA), European Commission and European governments, businesses and consumers). The UK’s space industry’s export share is therefore higher than the export share of the UK economy as a whole (at 29.8%)2.
Furthermore, over 1,200 UK organisations confirmed that they were engaged in space-related activities, which helped support more than 45,000 direct jobs and nearly triple this number across the supply chain in 2018/19 – a key incentive for developing the UK space industry. The sector also directly contributed £6.6bn to the UK economy, or 0.3% of total UK economic output, in the same period so it is clearly delivering value back to the economy.
Currently, the UK does everything in space except launch. The UK is already a heavy-hitter in satellite manufacturing but these satellites are being shipped overseas to launch, costing money and increasing the overall satellite cost. Creating domestic launch capability will help secure a dominant share of the lucrative European small satellite marketplace and help employers in the space manufacturing sector remain competitive in the global market for space-related products.
Astraius – the UK’s first commercially-operated horizontal ‘air launch’ company has been secured as a launch partner at Prestwick Airport’s spaceport development (more on Prestwick below). Founded in 2020, the company services the needs of the small satellite industry by using a more mobile, flexible and scalable approach than conventional vertical launch solutions, offering rapid re-launch options, complex orbits and multiple constellation options. Commenting more generally on why the UK wants to do space, CEO of Astraius Kevin Seymour, noted:
“The space economy is undergoing a rapid, transformative change, with the global industry potentially worth up to £490 billion by 2030. The UK has the potential to become one of the winners and the development of a vibrant small-satellite launch capability will be key. We’re hoping to be the first country in Europe to launch rockets into orbit and the horizontal launch technology, developed by Astraius, is set to be game changer.
The recent announcement of the three-way Scottish space partnership; linking Astraius, Glasgow Prestwick Airport and South Ayrshire Council, heralds the start of a new space journey for Scotland and the UK. The development of a new Spaceport at Prestwick, with Astraius providing horizontal launches from C17s, will be commercially exciting and strategically important.”
"We’re hoping to be the first country in Europe to launch rockets into orbit and the horizontal launch technology, developed by Astraius, is set to be game changer."
The pandemic exposed our dependency on data beamed from satellites, enabling online working, meetings and even shopping. The global economy is increasingly reliant on satellites to help keep it running and a growing proportion of jobs and opportunities depend on growth in the space sector. The sector could help power the COVID-19 recovery, enabling the UK to level-up and better compete in a post-Brexit global economy, but time is of the essence.
The window of opportunity to secure the launch market is closing rapidly according to Nick Shave, chair at UKspace. In its report, ‘Securing our future in space’3, Shave explained that unless important decisions on national space capability and programmes are implemented now, “...the sector will see a continued decline while other nations in the global space race move further ahead of us. “
Hence why so much pressure has been put on the Government to put in place the necessary regulations to enable launch. But the commercial pull of small satellite launches isn’t the only reason why the UK wants to do space. Human spaceflight is of increasing interest. Operators using orbital return systems would allow researchers in space to conduct microgravity research which could have wider applications to healthcare and agriculture. Trips to the International Space Station (ISS) would even be possible, bringing back research to the UK.
Although the UK is still a member of the European Space Agency (ESA), the UK’s departure from the EU heightened awareness of its heavy reliance on European (and American) space programs. Many of the services provided by such satellites (eg navigation, observation, internet connectivity and even self-driving/autonomous electric vehicles and smart kitchens) would be at risk without the UK’s own launch infrastructure. Space is therefore of strategic importance to the UK and the Government believes that growing our capabilities in the space operating environment domestically will ensure greater levels of safety and security, free from interference4. According to UKspace, having our own space capabilities will strengthen overseas partnerships, enabling the UK to contribute in critical areas like security and climate change. The alternative, and the risk of inaction, “is that we could soon be permanently stuck as a “tier three” space nation, sleepwalking into greater and greater dependency on others for our economic resilience and security.”5
One of the Government’s aims relating to satellites, as set out in its National Space Policy6, is to bridge the digital divide by using satellite technology to provide broadband for the last 5-10% of the population in locations where full fibre infrastructure is both difficult and expensive to install. In this vein, the UK is looking beyond its borders and in July 2020 the Government teamed up with a partner to acquire satellite technology firm OneWeb with the aim of building a global, in-orbit mega satellite constellation capable of providing enhanced broadband and other services to countries around the world. Completing this global network will require a high volume of satellite launches that will be quicker and more efficient to achieve from UK launch sites.
The Business Case for Space
The business case rests on the ability of the sector to capitalise on the social and economic advantages that flow from the capital investment in space science and technology. As pointed to above, the potential benefits of establishing a strong domestic space sector are significant and are broadly summarised below:
- Leveraged effects (such as direct, indirect and induced gross value added)
- Enabling spaceflight markets, bringing upstream and downstream supply chain benefits
- Growth effects
- Tourism benefits
Space-based assets are expected to be one of the critical infrastructures needed to meet the needs of future population growth. Satellites can improve the management of increasingly scarce resources, improve our ability to communicate and facilitate the efficient use of energy. Satellite technology and space exploration can both help answer prevalent questions on climate change, pollution and biodiversity loss while acting as a strategic asset to meet civil and defence goals. Putting an economic value against this is difficult but the potential returns of developing a strong UK space sector are enormous due to the fact that it is a vital future enabler of growth for services across numerous sectors, from aviation to insurance.
Over the past few years there has been a significant reduction in the cost of producing and launching satellites. This has allowed a wider range of companies and organisations to launch satellites. Satellites have shrunk from the size of a bus (eg the European Space Agency’s 2002 Earth observation satellite, Envisat, which weighed in excess of eight tonnes) to just 10cm³ and weighing not much more than a kilogram (ie ‘CubeSats’). Most satellites are now ‘smallsats’ or ‘microsatellites’ and these lighter payloads require less fuel and have smaller rocket requirements which reduces launch costs.
However, lower costs have driven global demand for safe and cost-effective commercial satellite launch services even higher, putting additional strain on launch capacity. Amid this rising demand, the Government appears keen to capture a good portion of the launch site market, noting in August 2018 that demand for commercial vertical launch (ie where the rocket takes off upright) and horizontal launch (ie involving a plane taking off from a conventional runway and carrying a rocket with it) is potentially worth £3.8bn to the UK economy over the next decade7. Without domestic launch sites, the UK’s long-term capacity to participate in space-based activities could be capped.
The UK’s northern latitude provides easy access to ‘polar’8 or ‘sun-synchronous’9 orbits – ideal for launching low earth, small satellites used for Earth observation. Its geography also means that launches can take place over the ocean and sparsely populated areas which is important for public safety. Launch sites in Scotland have a clear line of sight to polar and sun-synchronous orbits making launch easier, more effective and less costly than elsewhere. When these geographical advantages are considered alongside the UK’s new regulatory framework and strong industry in satellite manufacturing and services, the UK has a competitive advantage to compete for a substantial share of the market.
New and creative space companies that build space-bound satellites, rockets, detectors and cameras are popping up in the UK every year. A spaceport operating by itself isn’t nearly as attractive as one surrounded by companies that can support its operations. There are seven sites in the UK currently preparing to apply for spaceport operating licences (three vertical and four horizontal)10 and while many of these will be directly supported by Government grants, having a cluster of space companies located near the launch site improves the business case of developing these sites.
‘Spaceport clusters’ – a group of co-locating spaceflight related businesses around launch sites – will help bring economic and social prosperity to the local communities and regions in which they are situated. Space Hub Sutherland, Prestwick Spaceport and Discover Space UK at Campbeltown Airport, Kintyre have long-term plans and strategies in place to develop space clusters in Scotland, and Spaceport Cornwall also wants to create a satellite technology cluster of national importance.
Space Hub Sutherland, the vertical launch site being developed by regional development agency Highlands and Islands Enterprise (HIE), expect that the Hub will be the first step in unlocking further development of a space business cluster in the area. In fact, a new economic impact report commissioned by the Caithness Chamber of Commerce estimates that a ‘Northern Space Cluster’ could create up to 740 jobs in the Highlands and Islands, boosting the economy by £56m per year by the end of the decade. In addition to the clear economic benefits to the region, the report noted that the Hub will allow the local supply chain to capture opportunities arising from a new industry.
Led by space rocket manufacturer Orbex (which is expanding its launch vehicle development and manufacturing facility at Forres), there is the potential for a clustering of new innovative businesses in the region. Orbex’s early commitment to the area in opening up a manufacturing facility will likely encourage other companies that provide launch support or downstream elements of space to seek to be near these facilities and in close proximity to the main launch location. The Hub could also provide new opportunities for the several high value manufacturing firms already in the North Highlands region – none of which currently supply the space sector.
On track to become the leading cluster or space hub in the UK is Prestwick. Some of the world’s biggest aerospace companies have based themselves at the Prestwick Aerospace and Space campus. The campus is set to become one of Europe’s leading horizontal launch spaceports once launch services have been developed on the site, creating an unrivalled space supply chain network. A strong cluster of major aerospace companies, such as BAE Systems and GE Aviation, are already located in the area. In fact, around 16% of the UK’s space industry workforce are based in Scotland – with 50% of that workforce being based in and around the Glasgow Prestwick Spaceport site. Prestwick’s long-established heritage within the aerospace and aviation sector combined with its vast talent pool enhances the business case for building launch capabilities at the site.
The necessary investment in infrastructure that will enable Glasgow Prestwick Airport to operate as a spaceport (eg adding fuel storage, mixing areas and blast protection) as well as the required investment in launch service provider infrastructure (eg a satellite integration facility, a payload processing facility, mission control and range management systems) will help create more than 4,000 new jobs locally. Aware of the economic benefits, local councils and both the Scottish and UK Governments have supported the space programme at Prestwick by providing a multi-million pound funding boost through the ‘Ayrshire Growth Deal’. The intention is to transform Ayrshire into a world-class business region for the aerospace and space sectors, acting as a catalyst for wider growth and creating further jobs in the supply chain and ancillary activities.
G&T is South Ayrshire Council’s (SAC) Strategic Delivery Partner, commissioned to assist in achieving the mission of delivering a commercially viable, technically feasible and licensable spaceport.
Providing turnkey delivery and project management services at Prestwick Spaceport (PSP), G&T (with the support of its partners) will focus on reducing organisational risk to the primary stakeholders on the £23m infrastructure programme by fostering a collaborative approach with the client, project team, stakeholders, public interest groups and regulators.
Astraius LLC will operate its horizontal satellite launch operation from PSP in 2023. The Concept of Operations (CONOPS) for the launch platform consists of the deployment of a three stage solid propellant rocket from the rear of an unmodified RAF or USAF Boeing C-17 Globemaster using a drogue chute. Once the carrier aircraft is clear, the rocket motors ignite, inserting the payload(s) to a low earth orbit. The rocket motors are manufactured in Florida by Aerojet Rocketdyne Coleman Aerospace and will be transported to PSP. Operations at PSP will include payload processing, encapsulation, mating the payload to the rocket and final testing.
Mick O’Connor, Programme Director at Prestwick Spaceport, said that Prestwick will become an area of “technical, economic and innovation excellence... offer[ing] a host of opportunities beyond the spaceport”. Citing the planned new Aerospace and Space Innovation Centre as an example of the technical infrastructure that will come to the area, O’Connor said:
“It will include a visitor attraction focused on STEM (science, technology, engineering and mathematics) and will provide a central hub to drive the development of new technologies and new skills in aerospace.
“As well as providing facilities for new business incubation, development and training, the centre will accelerate existing research into advanced manufacturing techniques. This will help to support businesses in the sector.”
The centre will accelerate existing research into advanced manufacturing techniques, helping to support businesses in the sector.
The cluster will allow partnerships to be forged with the wider Scottish research ecosystem, businesses to be established, skills and investment to be leveraged locally and transport infrastructure to be improved.
Another region with ambitions to accelerate growth of its space sector is Cornwall. A number of space and space technology businesses already operate in the area. Local government investment in infrastructure is enabling manufacturing and testing of aerospace and space flight technologies in the region. It has helped attract Richard Branson’s Virgin Orbit, which plans to launch satellite-carrying spacecraft from Spaceport Cornwall, in Newquay. Its air-launch system launches a payload of small satellites into space from a rocket (called ‘Launcher One’) carried beneath the wings of a modified Boeing 747. Accordingly, its spacecraft require a runway with ground equipment to prepare for flight and so in May 2021 Added Value Solutions UK began building such a facility at the existing airport in Newquay – the horizontal launch site earmarked for the UK’s first sovereign orbital launch in 2022.
In addition to satellite launches there are a handful of potential future income streams for horizontal launch sites. Micro gravity flights, hypersonic flight services and even space tourism offering human space flight are future possibilities that would further support the business case for space. The Government is well aware of the significant returns on investment in space technology and this is why it has taken action to establish a regulatory environment in which the industry can thrive and manage risk.
Regulatory challenges in delivering space programme
The cornerstone of the UK’s space ambitions is the legal and regulatory framework – a timeline of which can be found below:
- 1967: UN ‘Outer Space Treaty’ introduced: places obligations on Governments to maintain a register of objects sent into space, ensure safety of operations and bear liability for costs for accidental damage to third parties from space activities
- 1986: UK introduced ‘Outer Space Act 1986’ (OSA) in response. Provides the legal basis for regulation of UK activities in space, Implementing the UK’s obligations under the UN Space Treaties
- Feb 2017: Government considers international aviation/space law is unsuitable to regulate safety and security risks of UK commercial spaceflight activities and announces forthcoming legislation on spaceflight to work alongside the OSA
- Jun 2017: New Bill (the ‘Space Industry Act 2018’) was introduced into the House of Lords in June 2017 and received Royal Assent on 15th March 2018, meaning that the OSA now only applies to space activities carried out by UK entities overseas
- July 2021: Three new pieces of secondary legislation came into force to support the Space Industry Act 2018, allowing the regulator to receive and assess licence applications for spaceflight and associated activities
The Space Industry Act 2018 (SIA) laid the regulatory framework for commercial space activities (including launch to orbit and sub-orbital space flight) and UK spaceports. The SIA provides a “skeletal” or high-level framework to enable commercial spaceflight but secondary legislation has been necessary, providing a more detailed framework and filling in some of the gaps of the SIA.
During 2020, the Government ran two separate consultations seeking views – one on three sets of draft regulations and accompanying guidance material about spaceport operation and spaceflight activities, and the other on insurance, liability and charging proposals. The flexibility and adaptability of the proposed regulations were applauded in the joint outcome of the first and second consultations11 but it was made clear that there was likely to be significant administrative costs for licence applicants. Excessively high third-party liability insurance costs were also expected to be a major challenge for small satellite operators. This could potentially deter operators from setting up shop in the UK or from launching their small satellites here and it was suggested that Government intervention and support would be needed to remain competitive with other national programmes that perhaps have clearer policies and more affordable insurance models.
After considering the consultation responses, amendments were made to the secondary legislation and guidance documents. On 29th July 2021, three new regulations came into force12 which aim to support safe, sustainable spaceflight activities and commercial operations in the UK that will help drive research, innovation and entrepreneurship in the space environment. Under the regulatory framework, the Civil Aviation Authority (CAA) will assume responsibility for the regulatory functions of the SIA (and the OSA) and this secondary legislation will assist the regulator in how it assesses launch or spaceport licence applications.
With all the necessary secondary legislation and supporting guidance now in place, the regulator can receive and assess licence applications. Those wishing to conduct commercial spaceflight activities can find all the guidance and apply for the relevant licence here.
From a regulatory perspective, challenges are likely to come in the form of regulator costs (licensing, monitoring), familiarisation costs, engagement costs (licensing, monitoring) and compliance costs (prescribed roles). There will also be costs from justice impacts, accident investigation, liabilities and insurance and environmental costs, but the Regulatory Policy Committee has considered and quantified these under its cost-benefit analysis13 and decided that the case for space still stacks up, despite the uncertainty about how the commercial spaceflight market might develop in the UK.
Fortunately, the UK space regulations take a flexible, less prescriptive approach to operating requirements. Operators will of course need to demonstrate to the regulator that risks have been managed to as low as reasonably practicable, but the regulations avoid detailed requirements or imposing excessive bureaucratic cost burdens. By taking this approach, operators will be able to cater for a wide range of rapid innovations in spaceflight technology, alleviating some of their concerns that the regulations won’t be able to keep up with the pace of innovation.
The non-prescriptive approach also addresses the concerns of respondents to the 2020 consultations on insurance, with the regulations now stipulating that no firm will face unlimited lability. Insurance requirements for all missions will, according to the Government, be proportionate to the associated risk and should be affordable in order to not deter companies from doing business in the UK. The Government, while intending to keep insurance concerns under review during the first tranche of launches, will use the ‘Modelled Insurance Requirement’ (MIR) approach14 for launch and for setting out insurance requirements in licence conditions. In short, the approach produces a bespoke insurance requirement reflecting the risk of each launch which incentivises safety. However, one challenge of using the MIR approach is that new operators may struggle to demonstrate the heritage of their launch vehicles.15
Perhaps one of the biggest regulatory barriers to consider by spaceflight operators is the natural and built environment, as activities by operators must not unduly impact either. Operators will need to complete environmental assessments that consider the effects of their proposed activities and take action to mitigate any risks. In addition, depending on the licence type being applied for, applicants will need to prepare a safety case, draw up a site security programme and also have cyber security strategy in place. There are also a number of additional hurdles and requirements to meet under the regulations and also operator duties that must be fulfilled.
The Government has confirmed that fees will not be charged for spaceport, range control and launch licensing activities under the SIA until 2024 in order to help support sector growth. Thereafter, it is understood that there will be a phased approach to full cost recovery. However, with regard to licensing orbital activities there will continue to be a one-off charge of £6,500 per licence under both the OSA and SIA. Although the Government has agreed to consider ways to reduce the licence fees for operators of constellations of satellites, the licence cost could be a barrier for smaller operators.
Finally, another area of uncertainty under the regulations is that no time limit has been set for the regulator to review licence applications but applicants must respond to requests for information within 28 days. This could prove disruptive to planned launch schedules but the regulator encourages prospective licence applicants to engage informally prior to submitting an application – an indication of the level of support the regulator is willing to offer to help ensure the process is smooth.
Overall, the widely supported regulatory approach helps pave the way for spaceflight and satellite launches from UK soil, bringing a wealth of benefits up and down the supply chain and unlocking billions of pounds worth market opportunities. Having this legal and regulatory framework in place will allow the UK to become the first European country to launch spacecraft and satellites from home soil in 2022, broadening the scope of the UK’s commercial space sector. In the coming months, G&T will publish further pieces outlining our involvement in the sector and demonstrating how we are supporting the delivery of new vertical and horizontal launch sites across the UK.
2 - Ibid.
8 - A polar orbit means that the satellite flies over the north and south poles of the Earth, instead of around its equator. This allows it to take pictures of regions in the north and south (such as the UK), and monitor things like glaciers and the aurora around the poles.
9 - A sun-synchronous orbit is similar to a polar orbit but is tilted slightly so that the satellite always passes over the same point on Earth at the same time of day – say 9am. This allows the satellite to always be in sunlight (useful for solar panels!) and always image the same part of Earth with the same lighting conditions.
14 - The MIR approach produces a bespoke insurance requirement reflecting the risk of each launch on a case by case basis. The MIR is based on the Maximum Probable Loss methodology used in the US and Australia but reflects the UK approach to calculating damages arising from death, injury and property damage as applied by UK courts. The MIR is intended to be the amount of potential third-party liability claims that an operator could incur in a realistically possible scenario.