He Spanish aerospace sector lives a moment of great expectations and powerful business struggle. The war in Ukraine has been a geostrategic rethinking by countries and greater investment possibilities. The irruption of private initiatives such as SpaceX, by Elon Musk, and the upcoming Kuiper satellite network of Amazon by Jeff Bezos embody a disruptive context for the sector. Thousands of small satellites begin to colonize space capturing data and photographs from any corner of the planet.
In the opinion of Jordi Hereupresident of public participation satellite operator Hispasat, “space is the battlefield of the 21st century. It is therefore a strategic and global field that will require the collaboration of everyone, veteran companies and new companies”. HIspasat is the third largest satellite operator in Europe.
Carlos Fernandez de la PenaCEO in Spain of the italian multinational telespace, remember that only ten years ago the space sector was the preserve of large companies of the type Airbus and the influence of state space agencies such as the POT, (the US space agency). He explains that since then the so-called ‘New Space’ has been taking shape, a concept that encompasses space activity around smaller and cheaper satellites. According to Hispasat calculations, the investments received by this private sector have been around 252,900 million in 10 years in Europe, for 1,694 companies.
This entry of private capital has caused an explosion of ‘startups’, which, linked to the reduction in the cost of manufacturing, the launch of small-sized satellites, produces a reduction in financial entry barriers. Companies in the sector, both large and small, shy away from the ‘New Space’ concept, understanding that the space pie will have to be distributed based on the services offered and not the size of the satellites or the distance of their orbit. SpaceX is a ‘New Space’ company, but it is also the current world leader in launching satellites. Telespazio participates in a large part of the European space development projects.
iris2
The announcement this week of the European space project iris2 for the creation of a constellation of satellites represents the definitive connection between the ‘New Space’ and the large companies linked to the space sector. The plan is endowed with 6,000 million euros and a consortium that integrates Airbus SE, Thales Alenia Space SAS, the satellite operators Eutelsat Communications, SES, Hispasat, Deutsche Telekom, Orange, OHB, Hisdesat Servicios Estratégicos, Telespazio and Thales.
But other space projects are underway. Compared to the large geostationary satellites that orbit at 36,000 kilometers and weigh several tons, the new nanosatellites embodied in ‘New Space’ weigh just over ten kilos and orbit at an altitude of 500 kilometers. This ‘democratization’ of space seems to have its days numbered in the face of future processes of business concentration and the commitment of large companies to the field of small satellites. Also due to the rapid development and growth of the best-placed ‘startups’.
The new technology around nanosatellites has opened the ban on regional satellites. In the Basque Country one has been launched, in Catalonia two and there are another two on the way, Andalusia is about to launch one, in the Canary Islands one is about to be launched and another is underway. While in Catalonia the satellite service has been contracted, which is owned by the firm satellite, in Andalusia or the Canary Islands it has been chosen to be the owner of the nanosatellite. These initiatives will continue, but the processes of business concentration will be unstoppable in the coming years and the speed of implementation of the satellite networks will be essential.
Space agency
‘New Space’ and the new Spanish Space Agency It has allowed many new companies to strengthen their projects. The Government has raised Spain’s contribution to the European Space Agency (ESA), up to 300 million euros. Since 2019, the Government of Spain has increased its contribution to ESA by 50%.
The Atlantic satellite network, which provides for the launch of 16 satellites (eight of them from Portugal) is the flagship project of the Spanish agency and the destination of much of the aerospace part (which will mobilize 4,533 million euros between 2021 and 2025 in public-private investments).
But there is also, for example, the network of the Spanish firm Sateliot, called to be the first global network of 5G satellites. And another Spanish private network is also planned, BeetleSatconstellation based on satellites of less than 200 kilos for global connectivity in Ka band for secure point-to-point communications.
Jaume SanperaCEO of satellite, recognizes the great potential of Spain in the space field, but warns that the new companies born around ‘New Space’ are going to need more public financing to prevent them from falling into the hands of foreign investors. “We should strategically bet on companies with a long history, that have intellectual property, have patents and that add value. Altogether there are no more than a dozen. We must bet on them, on possible global champions. The necessary investments to consolidate the growth of the new Spanish space firms are worth ‘only’ hundreds of millions of euros. I estimate that with a few billion euros of public money it would be possible to secure the future of the new Spanish New Space firms and from these to promote the entire ecosystem of companies providers that will be the next champions to support”.
Low-orbit nanosatellites make space projects cheaper and new companies are born, which need public funding to consolidate
lack of funding
The lack of financing is the big problem for the development of new space firms. As it is a strategic activity, any international investment fund requires that the registered office be transferred to the country of the reference shareholder. For this reason, in the sector there is a feeling that there will be business movements in the near future, as the nanosatellite also forms part of the plans of the large operators.
But while business mergers arrive, Spanish companies in the sector have high expectations. Sanpera believes that double-digit growth will continue in the sector: “Any company that does not grow at that rate is losing market share,” says Sanpera.
military uses
The ukrainian war has shown the importance of satellite services in the field of defense. In Spain, a reference company is hidesat, the government operator in the military field. But other companies that manufacture components or offer specialized observation or telecommunications services also play a leading role. “We have a great opportunity in Spain to lead Defense applications related to the Internet of Things and secure communications in NATO,” explains Sanpera. Hereu is of the same opinion: “Spain can provide experience in the industrial and operations field and also in innovation with the new companies that are leading initiatives for launchers and nanosats.”
Fernandez de la Pena believes that “for Spain it is important to achieve technological independence to be able to launch satellites into space, and have its own communications, navigation and Earth observation programs”. 120 people already work in the Telespazio subsidiary and the firm is executing a growth plan to triple its size. This Italian company invoices about 700 million and employs 3,000 people in Europe.
Fernández de la Peña points out that the Spanish space sector is basically civil. The defense area is the great client of high resolution images taken from space (more than 60%). A great field of development for Spanish companies is that of applications for the analysis of these images by means of radar combined with those taken by terrestrial drones or low-orbit nanosatellites.
civilian market
Rafel JordaCEO of Open Cosmos, recognizes the sweet moment that the space sector is experiencing in Spain, but claims that the great field of development for the future is more the civil market than the military, the latter more reserved for large public companies. In his opinion, Spain stands out in that for the first time in the coming years it will be able to face complete space missions. Being able to launch satellites and design and integrate all the associated technologies will be a radical change in the coming years.
Jorda highlights that Open Cosmos is focused on satellite applications aimed at sustainability, climate change analysis and monitoring of natural resources: “What prevails at the moment is the usefulness of the satellites, regardless of whether they are of high or low orbit. I do not think that all the technology of space is of dual use (military and civil). Many of the satellites that are made are viable without necessarily having an integrated application for defense services, like most ESA projects”, explains Jordà.
Jordà believes that in ten years Spain will have full capacity to deal with space projects in a comprehensive manner. But the most important thing will be the leap in the ability to analyze the data obtained: “The future is going that way, not only for the development of space infrastructures but also for the design of algorithms for the optimal treatment of data generated by satellites” , analyze.
Related news
According to the latest available data from ICEX and the sectorial employer Tedae, the aerospace sector invoices around 12,000 million a year and employs more than 50,000 people. But data from the space sector is not segregated. Investment in R&D accounts for 10% of turnover, which has grown by 42% in 10 years. The foreign sector is key, since 80% of the turnover of the Spanish space sector is obtained abroad. 75% of New Space employees have college degrees. It is an indicator that points to an industry with great added value and a high level of productivity.
Alen Space is a firm specialized in standardized products and components for small satellites and CubeSats based in Pontevedra. It focuses on shortening the development phases of all types of space missions. This company, with 15 years of life, has a presence in 16 countries and in its letter of introduction it always emphasizes that it has had 100% success in all the missions in which it has participated. Company sources stress that the key to the future of the Spanish space sector will be the financing of expansion plans and the maintenance of powerful human and technical teams: “A ‘know-how’ that reinforces technological independence; customer trust and partners in the work carried out, and initial support from public or private institutions that are clearly committed to this sector”.