To Win Over Germany, ESA Maps out How Ariane 6 Would Save Everyone Money

by

LONDON — The European Space Agency is proposing to inject 8 billion euros ($10 billion) into Europe’s launch sector over 10 years starting in 2015, including some 4.3 billion euros on a new Ariane 6 rocket, on the basis of a contract arrangement with industry in which ESA guarantees five government missions per year and in return industry fends for itself on the wider commercial market.

The proposal, delivered in the form of a 19-page response to Ariane 6 questions posed by Germany — the only big ESA member that has resisted the program — says the new Ariane 6 will cost ESA governments less to use than the current Ariane 5 and Europeanized Russian Soyuz rocket.

And unlike Ariane 5, which requires around 100 million euros per year of government support to keep launch service provider Arianespace from suffering financial losses, the Ariane 6 proposal says ESA will pay a marginal support cost only for government missions, and none for commercial launches.

The document, signed by ESA Director General Jean-Jacques Dordain and titled “Answers to Questions of Germany,” is dated Oct. 29 and has been sent to all ESA member states. ESA government ministers are scheduled to meet Dec. 2 in Luxembourg, where they will be asked to endorse the entire program.

Industry, led by Ariane 5 prime contractor Airbus Defence and Space and engine builder Safran, will be obliged to commit to an Ariane 6 price and schedule before ESA governments commit their financing. A series of milestone payments from ESA will follow program advances made by industry.

Airbus and Safran have agreed to form a joint-venture company, with other Ariane contractors to be added later, to manage Ariane 6. The two companies delivered to ESA on Oct. 27 a full Ariane 6 contract proposal with fixed-price commitments.

The proposal is now being examined by two independent ESA committees, which have been asked to deliver their final assessments in time for a Nov. 13 meeting, in Cologne, Germany, of ministers from key ESA governments — notably France, Germany and Italy — that are expected to finance most of the vehicles’ development.

The ESA document leaves several questions unanswered, perhaps inevitably given that it is projecting events over a 10-year period that depend in large measure on the global commercial satellite launch market. That market totals no more than 25 commercial launches per year, often less, and as such is susceptible to being destabilized if only a handful of launch decisions go one way rather than another.

Among the big unknowns: the sustainability of the low commercial launch costs offered by Space Exploration Technology Corp. and that company’s launch rate; the ambitions of China and India in the commercial market, and Western governments’ willingness to allow these vehicles to launch Western commercial satellites; and whether Russia and Ukraine are viewed in 10 years as reliable sources of launch services.

The ESA document says the agency’s Ariane 6 development model gives industry enough cover — five European government-paid launches per year, on average, to 2024 — to generate economies of scale to assure profit through its success on the commercial market.

The Ariane 6 will come in two models — Ariane 62 and the heavier Ariane 64 — that are basically the same rocket but with added solid-rocket boosters.

The solid-rocket boosters are the same technology used on Europe’s Vega small-satellite launcher, providing synergies between Vega and Ariane 6 that should further help industry keep costs down through scale economies.

The ESA proposal does not fully respond to a German concern about overall costs. ESA governments had agreed to spend 750 million euros per year on launchers for the 10-year period. They agreed, if tentatively, to permit an 800-million-euro annual investment only if ESA could find corresponding savings for the difference.

ESA’s response: It has not been able to find the 500 million euros in savings over the 10-year horizon, but “we are not far.”

Here is the agency’s logic: Each Ariane 64 will be priced, for government missions, at 115 million euros when measured in 2014 economic conditions, compared with today’s Ariane 5, priced at 165 million euros.

That means a 50-million-euro savings for each Ariane 64 launch for European government customers, or 25 million euros per satellite given that Ariane 64 business model, like that of the current Ariane 5, rests on launching two customer satellites at a time.

ESA has identified seven Ariane 64 government missions — including two, the launch of the Juice mission to Jupiter and the Inspire science mission, which use the entire launcher — between 2021 and 2024. Flying these missions on Ariane 64 instead of Ariane 5 would result in savings to ESA governments of 225 million euros.

In addition, the agency has identified 12 government missions that would fly on the less-powerful Ariane 62 rocket, to replace the current use of the Europeanized Soyuz vehicle starting in 2020 or 2021. Each Ariane 62 would be priced at 70 million euros for governments, or at least 10 million euros less than today’s Europeanized Soyuz, for a savings of 120 million euros.

The total savings of 345 million euros falls short of the 500 million euros promised, but ESA said it does not account for the 10 Vega missions likely during the same period.

Given the synergies in the production of solid-rocket boosters and stages for Ariane 6 and Vega, ESA says, additional savings to governments will be realized even if they cannot be quantified at this point.

Whether the ESA document will be sufficient to rally Germany to Ariane 6 is unclear, but industry and government officials asked to comment on it said it makes German acceptance more likely.

Germany’s adhesion to Ariane 6, and its agreement to scrap the Ariane 5 Midlife Evolution vehicle, will not solve the question of whether the Italian government will be able to invest at a level needed for the Vega and Ariane 6 programs.