Germany’s Budget Straitjacket Complicates Europe’s Ariane Funding Outlook

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BERLIN — Germany has informed the European Space Agency that German spending on launch vehicles will remain flat for the next decade, a decision that complicates the agency’s already difficult attempt to secure funding and design consensus for a new-generation Ariane rocket.

Because of Germany’s weight in any realistic rocket-funding scenario in Europe, the German decision means the 20-nation ESA will be limited to an annual launcher budget of around 850 million euros ($1.2 billion) per year between 2015 and 2024.

During this same period, the agency plans to introduce an upgrade to the existing Ariane 5 heavy-lift rocket, a new Ariane 6 vehicle and improvements to its new Vega small-satellite launcher.

Industry officials said the effect of the German move will delay introduction of Ariane 6 beyond the planned 2021 start date as ESA focuses on completing work on the upgraded Ariane 5 — a development calendar that Germany has always favored anyway.

Brigitte Zypries, whose job as German federal government coordinator for the aerospace industry makes her Germany’s de facto space minister, made clear May 20 that German spending on rockets would not increase.

Addressing a reception hosted by Europe’s Arianespace launch consortium during the Berlin Air Show here, Zypries said Arianespace and the rest of Europe’s launcher sector needed to cut costs substantially to remain competitive.

Turning to Arianespace Chief Executive Stephane Israel, Zypries said the company “will have to make substantial changes if it wants to remain successful.”

Israel responded that the company has gotten the message and has a working group assigned to find ways to cut costs immediately, without waiting for the planned Ariane 5 upgrade or Ariane 6.

ESA Director General Jean-Jacques Dordain confirmed May 21 that Germany recently served notice that launcher-related investment will not increase. “We have to account for the constraints of member states that will force us to remain within a budget corridor each year,” Dordain said.

He said that while it is Germany that delivered the news formally, other ESA member governments have made similar comments informally and that the agency now assumes it will have a ceiling of around 850 million euros. Earlier estimates of the cost of developing the planned new rockets called for spending of around 1 billion per year over a decade.

For Dordain and ESA, the budget straitjacket is one more complicating factor as it prepares for a December meeting of ESA government ministers to set launcher policy and, at the same time, confirm Europe’s participation in the international space station to at least 2020.

ESA and France remain solidly behind the design for Ariane 6 that ESA ministers tentatively approved in late 2012. German officials have said they are not persuaded by that design, despite its obvious advantages in reducing Ariane recurring costs during production. 

German industry and government officials are floating alternative designs they say may not meet the Ariane 6 production-cost targets, but will assure a robust German participation in Ariane 6, which they say is just as crucial as the cost targets to the program’s future success.

The spending cap makes it all the more important that the Ariane 5 upgrade, called Ariane 5 ME and featuring a new, restartable cryogenic upper stage, is able to do without the annual production-support payments that are a feature of Ariane 5. Now averaging some 100 million euros per year, these payments permit Arianespace to offer competitive market prices without reporting annual financial losses.

Dordain said that despite the assurances of Ariane 5 prime contractor Airbus Defence and Space, ESA questions whether the Ariane 5 ME business model is sufficiently solid to allow ESA to cease making these payments once the rocket is in full operation.

“We still need to find out from industry under what conditions this support to exploitation costs will no longer be needed,” Dordain said. As the operator of Europe’s current rockets, Evry, France-based Arianespace is viewed as a business that cannot be allowed to fail, or to report financial losses that would cause it to reduce quality control.

The new Ariane 6 rocket is designed to reduce, by about 50 percent, the cost of delivering a kilogram of payload into orbit compared with Ariane 5. Its target is to provide a launch at a cost of 70 million euros, assuming it is completing an average of at least nine missions per year.

Jean-Yves Le Gall, president of the French space agency, CNES, said here May 20 that the current 25 Ariane 5 integration facilities located throughout Europe will have to be cut to about three for Ariane 6.

Dordain said ESA, which received Ariane 6 cost estimates from industry in March, has asked the companies involved to make a fresh attempt at reducing the estimated charges. Among them was an estimated 750 million euros to build Ariane 6’s ground infrastructure at Europe’s spaceport on the northeast coast of South America.

Dordain said this charge appears far too high given what it cost to build, from scratch, the launch facility for the European version of Russia’s Soyuz rocket.

Dordain said that in addition to Ariane 6, the upgraded Ariane 6 and Vega enhancements, ESA must fit also within the 850-million-euro spending corridor the agency’s Ariane 5 annual support payments, the Ariane 5 technology-monitoring effort that ESA undertakes and the fixed costs of the French Guiana spaceport.

“It is difficult to predict funding needs for the next 10 years,” Dordain said. “If I cannot meet all the constraints, in early July I will present what I can do. It is a challenge.” 

 

Follow Peter on Twitter: @pbdes


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