Britain endorses ESA, promises increased export-credit support for industry

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PARIS — The British government has emphatically endorsed its investment in the 22-nation European Space Agency and rejected a parliamentary proposal that its space budget be more evenly divided between ESA and a national program.

Countering the centrifugal trend in Europe — highlighted by the U.K. decision to quit the European Union — the government reaffirmed that Brexit will have no effect on the UK role in ESA.

“The UK’s investment in the European Space Agency is an important part of our overall investment in space, from which we obtain excellent value,” the government said in a written response to questions from the UK Parliament’s Science and Technology Committee, which were published Nov. 24.

ESA “is a membership organization which contains members from both within and outside the European Union, and the UK will continue to be a member of the European Space Agency after the UK leaves the European Union.”

A well-timed endorsement of ESA

The government’s statement, coming just a week before ESA ministers meet in Lucerne, Switzerland, to debate a multi-year funding package of around $12 billion, will be music to the ears of ESA officials always wary that the zero-sum-calculus of European national budgets means that more national spending translates into less ESA investment.

The Science and Technology Committee in June submitted a series of questions to the government relating to a future British spaceport for horizontal- and vertical-launch space vehicles; the government’s plans to raise UK Export Finance’s role as an export-credit supporter of space projects; and why promised government grants to a Britain’s Reaction Engines Ltd. for a revolutionary rocket engine have taken so long to be disbursed.

Committee Chair Stephen Metcalfe expressed “disappointment” that the government took five months to respond.

The committee noted that more than 75 percent of the UK Space Agency’s funds go through ESA, leaving only a modest national program. “An even greater return” on investment than what is realized through ESA could be generated from a national space program.

That argument has been given more potency since the British pound’s drop in value relative to the euro, a decline that is all but certain to stress British investment in future ESA programs.

The government’s response said the UK national program in the past five years has grown from 20 million British pounds ($20 million at current exchange rates) to 88 million pounds per year.

Moral and regulatory support for a spaceport; no visible funding

The idea that Britain should develop its own spaceport has long been a slam-dunk headline in the British press, but the government in the past couple of years has stopped short of committing to anything more than a streamlined licensing process.

There has been no commitment to funding spaceport development.

Nonetheless, the government continues to make statements that are easily interpreted as coming from a future investor.

“The Government intends to establish the UK as the European hub for low-cost launch of small satellites,” the government said in its response to the Parliamentary committee.

“In parallel, we are supporting the development of the separate emerging market for suborbital flights. If we move quickly, we have the opportunity to be the first to provide both.”

The coming Modern Transport Bill will “contain legislation to allow for a variety of launch options, including horizontal, vertical and single-stage-to-orbit systems. The Government intends to introduce safe and practical regulation, together with access to launch ranges, at competitive pricing that will attract commercial operators.”

Metcalfe said he was “particularly pleased” that the government had extended its embrace to include both vertical- and horizontal-takeoff vehicles.

UK Export Finance: A trickle now, a stream to come?

UK Export Finance has not been a major player among export-credit agencies in the space sector compared to the United States, France, Canada and China.

The government said it had begun to integrate space exports into overseas visits by UK ministers, and in 2016 organized space-centered trade events in the United States, China, Indonesia and Mexico.

“UK Export Finance’s capacity for satellite transactions is the equivalent of our main competitors in the USA and France,” the government said, but the examples it gave of recent transactions suggests that while the capacity may be there, the willingness to use it is not.

The government cites 35.5 million pounds in financing for an Airbus Defence and Space satellite sold to the Russian Satellite Communications Co. in 2013, and 22 million pounds for an Airbus satellite sale to Malaysia’s Measat in 2014.

“UK Export Finance has actively raised its profile with the major UK satellite manufacturers and operators and is currently working on several active projects,” the government said.

Explaining the delays in funding for rocket-engine designer

The government in July 2013 announced it would invest 60 million pounds in Reaction Engines Ltd.’s space plane/hypersonic aircraft engine. But the money was slow in coming, in part because of the need to clear European Union state-aid regulations.

The funds began to arrive earlier this year, and Reaction Engines has said it always knew the process would be long.

The government’s statement says its funding decision “did not promise funding immediately, but was an in-principle decision to fund, subject to the development of a suitable business case…. Reaction Engines had not produced a suitable business case that met the government’s requirements.”

The company since has met the requirements and payments to Reaction Engines began in April, the government said. In addition, an ESA contract related to the company’s SABRE engine is under way.

The government did not say whether a post-Brexit Britain would be able to disregard European Union state aid rules.