Professional Documents
Culture Documents
StellaTkatchova
Emerging
Space
Markets
Emerging Space Markets
SPACE TECHNOLOGY LIBRARY
Published jointly by Microcosm Press and Springer
Editorial Board: Roland Dore (Professor and Director International Space Uni-
versity, Strasbourg)
Tom Logsdon (Senior member of Technical Staff Space Divi-
sion, Rockwell International, USA)
F. Landis Markley (NASA, Goddard Space Flight Center,
USA)
Robert G. Melton (Professor of Aerospace Engineering Penn-
sylvania State University, USA)
Keiken Ninomiya (Professor Institute of Space & Astronauti-
cal Science, USA)
Jehangir J. Pocha (Letchworth, Herts)
Rex W. Ridenoure (CEO and Co-founder at Ecliptic Enter-
prises Corporation USA)
Gael Squibb (Jet Propulsion Laboratory, California Institute of
Technology, USA)
Martin Sweeting (Professor of Satellite Engineering Univer-
sity of Surrey, UK)
David A. Vallado (Senior Research Astrodynamicist CSSI/
AGI, USA)
Richard Van Allen (Vice President and Director Space Sys-
tems Division, Microcosm, Inc., USA)
The objective of this book is to introduce commercial space activities and com-
mercialization processes in the last 15 years and to give an idea of the future
challenges NewSpace companies are bound to face when developing commercial
space markets. What is new and what has happened in these markets during that
period? Is there a business case for private companies for commercial space? What
are the targeted commercial space markets? Could the targeted markets of
NewSpace companies alone encourage the development of orbital commercial
space transportation services? Who are the future customers for commercial
space transportation markets? How can NewSpace companies attract investors? Is
there an existing business model that encourages this evolution, and what is it? Can
we learn lessons from the traditional space industry or other industries? What are
the lessons learnt from ISS commercialization for encouraging the creation of
sustainable NewSpace markets?In what way has the last 15 years made a difference
in the evolution of space markets? Is there a future for the commercialization of
space station services? These are some of the issues which will be discussed in
this book.
Over the past 20 years, space agencies have been exploring ways to encourage
private companies to get involved in the development of commercial space mar-
kets. Commercial launch services, space tourism, in-orbit satellite servicing, space
debris mitigation and space-based resource exploitation are some of the markets
worth exploring.
During those years, space agencies have learnt that commercialization of space
technology, built for scientific purposes, is challenging and difficult. Yet it also
holds the promise of new market opportunities, the development of new space
transportation vehicles and new space applications.
vii
viii Preface
Fig. 1 The first Cygnus commercial cargo spacecraft built by Orbital Sciences Corp. is
photographed by an Expedition 37 crew member on the International Space Station during
rendezvous and docking operations and SpaceX Dragon cargo grappled by the Canadarm (Credit:
NASA)
Preface ix
This bottom-up approach for gathering ideas will help ESA create future
programmes that will encourage the development of sustained exploitation of ISS
research utilization (e.g. lower cost, shorter time to access, increased number of
commercial companies, etc.), further evolution of Space 4.01 and regular ISS access
for the European user community. In response to the changing environment in the
global space arena, in 2017, ESA launched the Grand Challenge which is an
initiative to generate ideas, foster innovation, support cost-effective R&D and
encourage the development of new space applications.
Over the past 35 years, Europe has emerged as a recognized player in the
commercial space satellite launch market because of the successful Ariane
launcher. In order to sustain this competitive edge, Europe is now developing the
Ariane 6 launcher, which offers Ariane launch reliability which is coupled with a
competitive price advantage (Rumpf 2015). The European space industry will have
to find a balance between political and market forces, due to increasing competition
from US NewSpace companies in the commercial space transportation markets.
Nevertheless, implementing a bottom-up approach for gathering ideas for the
European space exploration strategy will result in new concepts that will offer
unique commercial market opportunities, not only to space companies but also to
non-space industries (e.g. Pharma, Biotech, etc.).
Background
The successful assembly of the ISS encouraged space agencies to start looking at
various ways to secure low-cost access to the station and to encourage the devel-
opment of new ways to utilize microgravity environment.
In recent years, the USA changed its strategy towards commercial human
spaceflight and focused on setting up goals for recapturing leadership in the
commercial space transportation market by reducing launch costs, thereby ensuring
a sustainable and efficient access to space (National Space Policy of the United
States of America, 2010, 28th of June).
Driven by the need to have reliable and permanent low-cost transportation
access to the ISS and to eliminate its dependency on Russian launchers, NASA
launched two new programmes in 2005, COTS and CCDev programmes, discussed
in Chap. 1.
With the launch of these programmes, NASA hoped to encourage the develop-
ment of privately owned commercial space transportation vehicles and to boost the
development of commercial space transportation markets. The successful evolution
of these programmes in the last 10 years led not only to the development of new
launchers like Falcon and Antares but also to the creation of the first commercial
1
Space 4.0 is considered to be the evolution in the space sector into a new era, through interaction
between governments, private sector, society and politics (ESA 2016d).
x Preface
transfer vehicles Dragon and Cygnus. They were successfully docked several times
to the ISS, transporting experiments and food to the ISS astronauts. All private
companies involved in investing, developing and building orbital and sub-orbital
space transportation vehicles or offering commercial services and products are
referred to as NewSpace companies.
The emergence of commercial spaceflight activities are, however, not new to the
international space community. For example, in the late 1980s and early 1990s in
the USA, a private company known as Spacehab developed a commercial module
to host experiments in the Shuttle Bay. In 1995, NASA signed a $54 million
contract with the company in support to the Shuttle/MIR logistics flights (Spacehab
2015). In the mid-1990s, Russias first attempts for commercial utilization of the
MIR space station emerged from the need to attract funding in order to keep the
MIR station operational2. The difficulties of the inevitable economic transition to a
market economy pushed the Russian space industry to face symbolic space budgets.
Russian space officials quickly identified new markets and encouraged the setup of
space entertainment projects (Tkatchova 2011). A few examples include flying a
Japanese journalist to the MIR space station in 1990, the launch of the Pepsi and
Pizza Hut branding projects and others3.
In Europe, the interest in commercial human spaceflight services started as a
result of the US and Russian commercial activities on board the ISS. They had a
potential promise, and in 2000, ESA set up a policy to encourage the commercial
utilization of 30% of the ESA Columbus module. Several R&D projects were flown
by ESA, linked to osteoporosis research (e.g. OSTEO facility), blood measurement
instruments (e.g. BMI), a new generation of energy saving lamps (e.g. high-
intensity discharge (HID) lamps) and some promotional products like the Mediet
food tray (ESA, ESA Health Care Network 2005) using new food processing
technology.
In contrast to the rest of the ISS partners, Japan started its commercial activities a
bit later. In 2004, JAXA set up the JAXA Open Space Lab programme aimed at the
creation of new projects and the development of a space brand4. The ASICS space
shoes is an example of such a commercial project. Other interesting commercial
projects are related to the development of space products, like space sake and space
yoghurt that was flown on the Russian ISS segment. These commercial projects
demonstrated the potential existence of commercial space markets, such as cargo/
crew transportation markets, space tourism, in-orbit satellite servicing and micro-
gravity R&D. Since 2000, commercial space start-up companies, or so-called
NewSpace companies, have attracted over USD13.3 billion investment from over
2
The MIR operations costs per year were between $220 million and $240 million (Astronautix,
1997). For more information, see Chap. 5.
3
Denis Titos flight was initially planned to be to the MIR station, however, with the de-orbiting of
the station in 2001, Denis Tito flew on the Russian segment of the ISS.
4
The space brand JAXA launch was called JAXA Cosmode Project which provided an official
brand for certified space-related products.
Preface xi
ventures, acquire new competencies and access new markets. In this way, they will
reduce Europes dependence on non-EU technologies.
The pioneering nature of developing new space transportation vehicles, the risks
before NewSpace companies in developing commercial spaceflight markets, in
defining the unique selling position of their solutions and dealing with the difficul-
ties to attract private investors face similar challenges and risks that private
companies and space agencies encountered in the space station commercialization
(e.g. MIR, ISS).
Traditionally, space agencies are the biggest public investors in space station
development and utilization. Historically, private investors had been reluctant to
invest in space station commercial utilization and projects due to high market risks
and long space qualification processes of commercial payloads. Private investors
had mainly invested in the development of telecommunications, navigation and EO
systems (e.g. DigitalGlobe, RadarSat, Deimos Imaging, exactEarth, Skybox). Tra-
ditionally, they have considered investments in launch systems and human space-
flight activities as risky and costly.
Conclusions
demand for reusable vehicles? What will be the environmental impacts from using
these reusable rockets? Will venture capitalists understand and be willing to invest
in the development of these vehicles and the construction of inflatable modules?
The current success of the NASA COTS and CCDev programmes provides a
precedent in the US human spaceflight programme and creates possibilities for
achieving the successful utilization of the ISS on-board resources. Other space
agencies like ESA have undertaken a bottom-up approach for gathering innova-
tive ideas for sustained exploitation of ISS utilization (e.g. lower cost, shortened
time to access, etc.). The successful evolution of these programmes and the creation
of self-sustainable commercial space markets may encourage space agencies to
implement similar programmes for future Lunar or Mars missions.
The encouragement and support of my family and friends made this book a reality.
First of all, I would like to thank Ramon Khanna and in particular Alessia Valdarno
for their support and patience in the preparation of this book.
Next, I would like to thank Michel Van Pelt, Todome Kazuhide, Bruno
Carvalho, James Murray, Pierre Lionnet, Arno Wielders, Pierre-Francois Migeotte,
Gianluigi Baldesi, Jim Keravala and Ken Davidian for discussing and reviewing the
chapters and for providing me with their valuable ideas and recommendations.
Their inspirational views on the future of space exploration, the role interplanetary
travel, sub-orbital space industry, in situ resource mining, space debris mitigation
and commercialization of space technology inspired me to write many of the
chapters.
In addition, I would like to thank Amir Blachman, Silvio Sandrone and Clark
Lindsey for sharing with me their personal views on the future development of
human spaceflight, NASA COTS programme and evolution of commercial space
markets. I also would like to thank Barry Johnson, Theo Pirard, Nadia Imbert-Vier
and Bert Ulrich for they support on getting access to the right information and
access to the relevant images. Also I would like to thank Booster Industries,
NanoRacks, Bigelow Aerospace, Axiom and Planetary Resources.
I am indebted to my mum, the best Mum in the world, Stefana Roussenova, for
her courage to spend a month reading and editing my English and encouraging me
to continue writing. In addition, I would like to thank Mina Roussenova for helping
me crystallize some ideas and for her enthusiasm.
Finally, I would like to thank all my family, partner and friends for their great
support and patience during all these years.
xv
About the Book
This book analyses the commercial space activities and commercialization pro-
cesses of the last 15 years and maps the future challenges that NewSpace companies
will face developing commercial space markets.
What is new and what has happened in these markets up till now? Is there a
business case for private companies for commercial space? What are the targeted
commercial space markets? Who are the future customers for commercial space
transportation markets? How can NewSpace companies attract investors? Can we
learn lessons from traditional space industries or other companies in other areas? In
what way have the last 15 years made a difference in the evolution of space
markets? Is there a future for in situ resource mining, space debris services,
in-orbit satellite servicing and sub-orbital transportation? What are the lessons
learnt from ISS commercialization?
In addition the reader will find a synopsis of several space transportation
programmes, commercial space markets, future Moon and Mars missions, in situ
resource exploitation concepts, space debris mitigation projects and sub-orbital
commercial markets. Major lessons learnt are identified, related to the attraction
of first-time customers and long-term R&D funding, managing technological and
market risks and developing new markets and applications.
xvii
Contents
xix
xx Contents
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
About the Author
Stella Tkatchova is a project manager for a Belgian space company and previ-
ously worked as a project manager on a long-term research innovation for the
European Commission. She also worked at the European Space Agency (ESA) on
payload commercialization and industrialization for the International Space Sta-
tion. In 2006 she was awarded a PhD by the Faculty of Aerospace Engineering of
the Delft University of Technology (the Netherlands), and she holds a Master of
Space Science from the International Space University (ISU).
She is the founder of the International Journal of Space Technology Manage-
ment and Innovation (IJSTMI) and an author of several articles on the commercial-
ization of space technology and the book Space-Based Technologies and
Commercialized Development. Her work and research experience give her a unique
insight in the financial and management issues that impact the future of commercial
space markets and NewSpace companies.
xxiii
Chapter 1
Space Agencies Commercial Space
Transportation Programmes
1.1 Introduction
The objective of this chapter is to present the demand for commercial launch
services, introduce space agencies commercial space transportation programmes
and analyse their economic impacts. The chapter will describe the role of commer-
cial programmes in the context of the evolution of NewSpace markets and future
space agencies exploration missions. The final recommendations will be related to
NASA COTS, CRS and CCDev1 programmes in the context of encouraging the
creation of sustainable commercial NewSpace markets, development of low-cost
launchers, new markets and space applications.
1.2 Background
1
NASA Commercial Orbital Transportation Services (COTS) and Commercial Resupply Services
(CRS) are NASA programmes for delivering cargo to the ISS, Commercial Crew Development
programme (CCDev).
Space Review 2004). With the change of NASA management, there was a switch to
aiming at the creation of Ares 1/Ares V rockets and Orion capsule, to be designed
and developed by NASA. The proposed architecture for Constellation faced major
technical and budgetary challenges, mainly involving the Ares I launch vehicle,
which had to be safe, simple and soon (Simberg 2009). The proposed US
Constellation programme was a wonderful concept for returning to the Moon and
for future human Mars exploration missions, but unfortunately symbolic budgets
were allocated for it (Fig. 1.1).
In 2010 the Obama administration cancelled the US Constellation programme
but continued to support the development of US affordable, safe and sustainable
commercial space flight technology. The NASA COTS programme objective was
set to encourage private companies to design, develop, and test commercial space
transportation launchers and transfer vehicles. They will be used by NASA for
serving primarily transportation needs for the ISS and other customers after the
retirement of the Space Shuttle. Parallel to it, the administration also continued
supporting the future development of the Orion vehicle and the heavy Space
Launch System (SLS).
At present new ideas for future NASA exploration missions are emerging, for
instance, a mission for the implementation of an asteroid retrieval mission by 2025
(Studies K. I. 2012) by moving an asteroid the size of around 7 m to Lunar orbit,
another one for performing in situ resource utilization (ISRU) activities by astro-
nauts, a mission for analysing and extracting natural resources (i.e. a 7 meter asteroid
may contain up to 100 tons of water (Studies K. I. 2012), carbon, nitrogen, iron,
nickel, sulfur, platinum-group materials, etc.). A future Near-Earth Asteroid (NEA)
mission may attract either asteroid mining companies to exploit the resource-rich
$ in millions
25,000
Pres. FY05 Five-Year Retire Crew Complete Station First Human
Budget Plan Shuttle Exploration Research Objectives Lunar Mission
vehicle
20,000
FY05 Budget
(inflationary growth post 2009)
Exploration Missions
15,000
Human/Robotic Technology
Crew Exploration Vehicle
Space Shuttle
ISS Transport
5,000
0
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
NOTE: Exploration missions Robotic and eventual human missions to Moon, Mars, and beyond
Human/Robotic Technology Technologies to enable development of exploration space systems
Crew Exploration Vehicle Transportation vehicle for human explorers
ISS Transport US and foreign launch systems to support Space Station needs especially after Shuttle retirement
asteroid or space companies ready to exploit the asteroid resources. The advancement
of full-scale commercial operation activities will also boost the demand for services
to space customers. Low-cost space transportation vehicles may become the primary
transportation vehicles in future mining missions, and the commercial space trans-
portation industry will thrive. By demonstrating the success of commercial space
transportation vehicles, NASA can continue to encourage the development of com-
mercial space transportation markets.
With the launch of NASA COTS programme, the agency avoided the experience
of developing an extremely expensive and complex launch vehicle, such as the
Space Shuttle. The programme was born of NASAs need to access the ISS, to
reduce technology development costs and to encourage the creation of a new type
of vehicle that will serve both institutional and commercial customers.
The demand for commercial launch services is both for civil and military
purposes, while the demand for sub-orbital launches is considered to be primarily
commercial. In addition there is a demand for launching 1520 commercial GEO
satellites globally every year. SpaceX is now launching about 50% of those. The
number of LEO satellites ranging from Iridium and DigitalGlobe mini-sats to
Planet Labs CubeSats is quite substantial and growing rapidly. SpaceX, ULA,
Orbital as well as new small launch vehicles will be launching more and more of
those as well (Fig. 1.2).
The demand for orbital launch services naturally increased with the retirement of
the US Space Shuttle in 2011. Its withdrawal created a new market opportunity for
launch services to the International Space Station (ISS). Currently this opportunity
is managed by NASA and well exploited by Russia in the provision of Soyuz launch
services to the USA. In 2009 NASA signed an agreement with Russia for longer-
term flight opportunities on board the space station that allow US and European
astronauts to work on board the space station for a period of around 6 months. The
NASA and the Russian Federal Space agency (Roscosmos) also signed a contract
worth of up to USD719 million under which NASA purchased 15 seats and 5.6 tons
of cargo delivery to the space station. In 2013 the US President extended the
Historically in space industry, civil and military institutional customers have had a
strong impact on the demand for launch services, thus influencing the commercial
launch services market.
Crewed flights on board commercial transportation capsules to the ISS are
assumed to start in 2017, as presented in Fig. 1.3 that shows NASA ISS commercial
cargo and crew flights from 2012 to 2021.
The FAA assumed that there would be around 64 launches using commercial
cargo and crew services for ISS resupply which means around 67 launches per
year of heavy launch payloads. In this way NASA has guaranteed a sufficient
launch market for NewSpace companies until the lifetime of the ISS.
These launches may increase in case of the successful development, launches
and exploitation of Bigelow space stations. However, the institutional demand for
commercial crew and cargo transportation services may drop within several years
after the end of the ISS in 2028. The rate of reduction of the demand until the end of
the ISS will be directly influenced by NASA and other space agencies operating
human space flight exploration missions and will be dominated by the institutional
customers.
Fig. 1.3 Forecast for COTS, CRS and commercial crew missions
1.4 Demand for Sub-orbital Launch Services 5
However, the lack of post-ISS exploration of human space flight missions will
create a very high level of strategic uncertainty for NewSpace companies. In 2024
the ISS markets will have reached a mature stage of market evolution, and there will
be a sustained demand for microgravity platforms. Therefore, NewSpace compa-
nies will be competing to offer cargo launch services2 not only to NASA but also to
military customers like the US DoD and DARPA.
The question arises: what uses these commercial human-rated transfer vehicles
will be put after the retirement of the space station? Do NewSpace companies
already consider any new ideas, for example, Bigelow inflatable stations,3 future
Mars One mission or other exploratory missions?4 Future Mars missions will
generate demand for future commercial launch and cargo services and hence
open new markets for NewSpace companies. An additional demand for commercial
cargo launch services may be generated from the teams that participate in the
Google Lunar X Prize or NASA Lunar Catalyst programme and use NewSpace
launch vehicles for launching their rovers to the Moon.
In order to prevent loss of revenues due to the space station retirement,
NewSpace companies have already started securing contracts for launching tele-
communications, military and Earth observation satellites. In the case of SpaceX,
its launch list was so overbooked that certain launches get delayed.
NewSpace companies will most probably start offering regular cargo launch
services to military institutional customers that will generate sufficient demand for
their services and thus put traditional space companies under competitive pressure.
With the successful launch of SpaceShipOne in 2004, the last 12 years have brought
hopes for the creation of a sub-orbital industry with the prime objective to offer
space tourism services. Sub-orbital vehicles will fly up to 100 km to the border of
space and offer a microgravity environment of around 4 min which will give
researchers short flight opportunities at a lower cost and higher flight rates than
flights to the space station.
Presently high publicity is given to sub-orbital vehicles both in the USA and
Europe around 2004; new sub-orbital vehicles are under development, and compa-
nies start branding and offering sub-orbital transportation services for both
2
In particular for the companies that are developing human-rated transfer vehicles like the Dragon,
Cygnus and the CTS-100 under NASA COTS programme.
3
In 2016 the BEAM module was launched and docked to the ISS, and several days later it was
successfully opened.
4
Future Mars missions could also be driven by private initiatives similar to the Mars One of
sending on a one-way trip future Astronauts to Mars on a one way trip to Mars. At present
advocates for future Mars missions believe that SpaceX Falcon Heavy launch vehicle provides the
most affordable transportation means.
6 1 Space Agencies Commercial Space Transportation Programmes
Fig. 1.4 Tauri projections for sub-orbital flight (Group T. T., Suborbital Reusable Vehicles: A
10 year forecast of Market Demand 2013)
5
This market is similar to the targeted ISS RD markets that ISS partners wanted to develop in 2001
when they initiated ISS commercialization.
1.5 NASA Commercial Space Transportation Programmes 7
and fewer safety regulations will apply for flying payloads than for space tourists. In
spite of that, NewSpace companies may face similar challenges in developing these
markets as the ISS partners faced in developing new markets and attracting
pharmaceutical companies to perform research in microgravity environment.
In the post-ISS era and in view of the lack of any other space station in LEO,
there is a possibility for an increase of demand for basic and applied research on
board SRV, particularly with space agencies becoming the prime customers for
performing experiments on board sub-orbital vehicles. Therefore, it is possible that
demand for this market would outgrow the space tourist one. In addition, certain
NewSpace companies may decide to develop first this market and only then the
space tourist one, as the safety and regulative requirements are much more stringent
and costly to companies rather than the ones for qualifying payloads for unmanned
flights.
The third market with an unexplored potential has to do with the use of
sub-orbital vehicles for microsatellites launches. At present Virgin Galactic,
XCOR, Starfighters, Dynetics, Interorbital Systems, Generation Orbit Launch Ser-
vices and Microcosm are looking at adapting their vehicles for launching
microsatellites. Nevertheless, sub-orbital launch service providers will have to
develop strong business cases and identify demand in order to convince their
investors to invest additional money in adapting their sub-orbital vehicles for
microsatellite launches.
Both the demand growth for space tourist activities and basic and applied
research can be expected; the latter may even overtake in demand the space tourist
market. With the expected retirement of the ISS in 2024, space agencies may turn to
sub-orbital platforms for performing their microgravity experiments. NewSpace
companies may at first develop this market due to less stringent requirements for
flying payloads than space tourists. With the potential growth of microsatellite
market using sub-orbital vehicles still unclear, the expected growth of 4% of the
space tourist market may be sufficient to encourage the sub-orbital industry devel-
opment and growth.
Countries all over the world have set up Space Act Agreements in order to be able to
encourage the NewSpace companies to exploit new business opportunities.
In Europe Sweden has set up a Space Act Agreement that establishes the
regulatory regime of having licences for carrying space activities from Swedish
territory.
In the USA, NASA partners with various organizations under the SAA and
offers new commercial opportunities to the industry. The agreements under SAA
are reimbursable, non-reimbursable, funded and international. Through the funded
and unfunded agreements, NASA encourages the development of commercial
space crew and cargo transportation capabilities in the USA. By 2014 NASA has
signed the following funded6 and unfunded7 Space Act Agreements (SAA):
Funded Crew SAA: Round I Blue Origin, Boeing, Sierra Nevada Corporation,
United Launch Alliance (ULA) and Paragon Space Development Corporation
Funded Crew SAA: Round IIBlue Origin, Boeing, Sierra Nevada Corporation
(SNC), Space Exploration Technologies (SpaceX)
Funded Cargo SAA: Orbital Sciences Corporation, SpaceX
Unfunded Crew SAA: Round IIAlliant Techsystems Inc. (ATK), Excalibur
Almaz Inc., United Launch Alliance (ULA)
6
Funded agreements are the ones under which the commercial crew/cargo services are for concrete
NASA missions.
7
By these types of agreements, NASA encourages these companies to develop innovative tech-
nologies by sharing technical requirements for cargo and crew transportation vehicles.
1.7 NASA COTS 9
The SAA agreements provide opportunities for the industry to easily access
NASA space engineering competencies and gain a better understanding of NASA
crew/cargo requirements. The benefit for NASA is to gain access to a variety of
suppliers that operate commercial crew/cargo space transportation vehicles. Being
one of the main customers of NewSpace companies, the agency will have the
purchasing power to negotiate lower prices for using commercial space crew and
cargo services.
In Asia, Japan is a country with a well-established Space Activity Law which
encourages private companies to launch satellites and boost commercialization of
space technology.
In 2006 NASA launched the NASA COTS programme with an initial budget of
USD800 million with the objective to encourage commercial space industry to
develop and demonstrate safe, reliable and cost-effective transportation capabili-
ties. The companies are paid only when reaching certain development milestones in
their technology concept developments.
Capability AExternal/unpressurized cargo delivery and disposal
Capability BInternal/pressurized cargo delivery and disposal
Capability CInternal/pressurized cargo delivery and return
Capability DCrew transportation
In 2006 three companies were selected to be financed under the COTS
programme: SpaceX, Rocketplan Kistler and Orbital Sciences Corporation. However,
in 2007 NASA terminated its agreement with Kistler due to financial and technical
shortfalls. Both companies were committed to the development of an integrated cargo
transportation system that includes launcher vehicles and cargo/crew capsules.
SpaceX won a contract of $396 million for the development of the Falcon
9 launch vehicle and the Dragon capsule, while Orbital won a contract of $288
million for the Antares launch vehicle and the Cygnus spacecraft.
Since 2010 SpaceX has launched the Falcon 9 successfully many times and a
few times the Dragon cargo vehicle which was the first commercial transfer vehicle
to visit the ISS. SpaceX has won an additional funding of $1.6 billion for providing
at least 12 cargo resupply missions to the ISS for NASA and its ISS partners. The
Antares vehicle of Orbital was launched in 2013, and Cygnus transfer vehicle
successfully docked to the ISS. In addition Orbital also won a $1.9 billion contract
with NASA for the provision of at least eight cargo resupply missions to the space
station. Through NASA COTS programme, NASA has access to two launch and
transfer vehicles. Through the implementation of NASA COTS programme, NASA
may have lower technology development and operating costs and at the same time
implement a programme that is attractive politically for NASA and offer an
interesting commercial opportunity to the industry. Furthermore, NASA may
10 1 Space Agencies Commercial Space Transportation Programmes
offer to the rest of the ISS partners to use the Dragon and Cygnus transfer vehicles
for transporting their experiments to the International Space Station, thus indirectly
supporting the US NewSpace companies to enter new international markets.
Therefore, space agencies that have invested in developing and launching their
transfer vehicles like the ATV8 and the H-II will be exposed to competition from
the Dragon/Cygnus transfer vehicles. Furthermore, due to budgetary pressures in
combination with lower launch prices from NewSpace companies, certain ISS
partners may choose to use the services of NewSpace companies. This could be
beneficial in the short term but could endanger the future growth of the national
space companies that contribute to the development of the ATV and H-II vehicles.
The launch success of SpaceX Falcon vehicle and Dragon capsule demonstrated
the potential of the COTS programme. A similar COTS-like programme approach
may be discussed in the long-term future for NASA Asteroid mission to NASAs
Innovative Lunar Demonstration Data (ILDD) programmes. The true success of
NASA COTS programme can be at hand only after the demonstration of safe,
reliable and cost-effective sustainable space transportation capabilities even after
the lifetime of the International Space Station. This programme encourages US
NewSpace companies not only to develop new crew/cargo launch and transfer
vehicles but also to enter the international launch markets and compete with
traditional space companies.
8
ESA ATV programme had initially planned to have built and launched seven ATV to the ISS.
However, only five were launched to the ISS; the ATV was considered by many experts as one of
the most expensive transfer vehicles.
1.8 NASA CCDev 11
460
440
212.5
92.3 80 75
22 18 20 6.7
3.7 1 1.4
Blue Origin Boeing Paragon Space Sierra Nevada United Launch Space X
Development Corporaon Alliance
Corporaon
Starting from 2019, SpaceX and Boeing will be providing crewed transportation
services to the ISS. NASA had chosen Boeing CST-100 Starliner concept and
SpaceX Crew Dragon capsule for launching astronauts to the ISS.
Under CCDev 2, NASA also selected unfunded proposal from companies like
ULA, ATK and EADS Astrium and Excalibur Almaz Inc. Sadly Excalibur Almaz
was liquidated and its only capsule auctioned.
Nevertheless, the proposals selected under CCDev 2 without NASA funding
should not be ignored. Three companies were selected by NASA, and they self-
finance their technology developments and will cooperate with NASA for the
following developments:
ULA proposed additional work for human rating of the Atlas V launcher. NASA
signed a SAA for sharing information towards human rating Atlas V.
ATK and EADS Astrium proposed the development of the Liberty rocket
derived from Ares I and Ariane 5. With this agreement, NASA is sharing
expertise and technology.
At present these agreements are unfunded. However in case the above compa-
nies succeed in their technology developments, it is possible that NASA should
change its policy depending on change of its mission needs and fund them. The
companies above may be able to attract sufficient non-NASA customers and enter
new markets; thus, further evolving their concepts and generating sufficient inno-
vation are of interest to NASA.
The objective of NASA CCP was to develop space transportation systems that will
safely launch astronauts to the ISS. The agency foresees the CCP programme as a
cost sharing for new technology developments.
NASA defines the technical requirements for the crew vehicles, such as requiring
that the vehicles carry at least four crew personnel, must be capable of providing a
safe haven during an emergency in space and be capable of remaining docked to the
space station for a minimum of 210 days. The companies select their own designs to
fulfil those requirements and lead the development of the implementations of those
designs. NASA and the companies agree on an oversight framework, development
milestones and tests to insure that the systems do in fact fulfil those requirements to
NASAs satisfaction.
The CCP consisted of several phases, each with particular goals, rounds of
participant selection, separate funding requests and contracts. The phases include:
Commercial Crew Development (CCDev)Split into CCDev 1 and 2
Commercial Crew Integrated Capabilities (CCiCap)Originally CCDev 3
1.10 NASA Flight Opportunities Programme 13
NASA issued a call for proposals in which commercial companies can offer to
NASA relay services to support users at Mars, including landers and rovers and
potentially future aerobots and orbiters. The commercial company will owe and
operate the relay service orbiter, while NASA will service over some period of
time. The idea is that the agency encourages innovative and more cost-effective
ideas9 for serving the communication needs of the Mars landers.
Data relay services are provided for current and future Mars missions such as
Mars Atmosphere and Volatile Evolution (MAVEN), Interior Exploration using
Seismic Investigations, Geodesy and Heat Transport (In Sight) and the European
mission ExoMars. Besides NASA, other space agencies like ESA may buy data
relay services for supporting data communication for their missions. In addition
other future Mars missions like Mars One may use these services to complement
their own.
Mars-bound Demonstration Mission and Communication Satellite will be
launched in 2018. Future data relay service providers will be able to target potential
customers not only institutional customers such as NASA and ESA but also offer
services to NewSpace companies, such as Mars One. Furthermore, securing space
agencies as an end customer for commercial data relay services will attract private
investors to the project. Nevertheless, certain commercial companies may be
reluctant to operate such orbiters due to high operating costs. However, these
9
NASA successfully demonstrated optical communications from the Lunar Atmosphere and Dust
Environment Explorer (LADEE) spacecraft at the Moon to Earth, with download rates of
622 megabits per second (Mbps). It also demonstrated an error-free data upload rate of 20 Mbps
transmitted from the primary ground station in New Mexico to the spacecraft orbiting the Moon.
1.13 Economic Impacts 17
companies may receive initial support from NASA to leverage the risk associated
with high operating costs.
The above initiative opens new business opportunities for NewSpace and tradi-
tional space companies which will bring benefits both to space agencies and
commercial companies.
The direct and indirect economic benefits are interdependent: some like employ-
ment or revenues from certain economic activities have spillovers in other sectors
like information services, manufacturing, real estate, rental, leasing, finance, insur-
ance, health care, education and others. For example, in 2010 the FAA measured
the economic impacts of commercial space transportation services in other indus-
tries taking into account the employment, economic activity (the value of goods/
services produced in an economy) and earnings and the sum of employees salaries
(FAA, The Economic Impact of Commercial Space Transportation on the
U.S. Economy 2010).
The economic spillovers of commercial space transportation activities will
probably increase with the market evolution of commercial space transportation
markets. Future European institutional bodies such as national space agencies may
consider measuring the economic spillovers from NewSpace activities in other
industry sectors like housing, health, education and others.
In spite of that, NewSpace companies will have to be able to attract private
investment, develop their business models, calculate their net present value (NPV)
and rate of return, perform sensitivity analysis and perform SWOT analysis and
therefore will have to measure the socio-economic impacts of their activities. They
could be the following:
Direct benefitsEmployment, new space application markets, revenues from
sales, increased cost savings, technology reliability and operability
Indirect benefitsFree publicity, technology innovation, international partner-
ships, education and environment monitoring/protection
In the context of the economic benefits which NewSpace companies bring, there
are many examples. In the orbital market companies like SpaceX, they generate
both direct and indirect benefits. For example, the direct benefits for SpaceX are
around 2000 employees, revenues from sales, increased cost savings for their
customers, technology interoperability, free publicity and international partner-
ships. Increased cost savings are from lower launch prices which SpaceX offers
to its customers, due to their capability to keep development, design and production
in in-house facilities and the lack of subcontractors. Combined with aggressive
business development, this will allow them to have a very competitive market
positioning and lower launch prices and to put competitive pressure on traditional
launchers like Ariane 5 ECA, Proton M and others.
SpaceX with their Falcon 9 vehicle offer competitive prices for commercial
satellite operators. Blue Origin with their New Glenn reusable first stage launcher is
expected to be launched in 2020 from Cape Canaveral which also offers compet-
itive launch prices. Their first customer for their launch in 2021 is Eutelsat, a
European organization which traditionally launches its satellites with Ariane 5.
These prices not only put under competitive pressure traditional launch service
provide, but put immense pressure on Arianespace to be able to offer competitive
low-cost launch services. ESA and the EU in the long-term future may decide to
create a joint undertaking which will not only aim at implementing the EU space
strategy but also contribute to support European space companies to sustain their
competitiveness and develop new services.
1.14 Conclusions 19
1.14 Conclusions
The chapter has discussed the demand for commercial launch services and intro-
duced space agencies commercial space transportation programmes describing
their role in the evolution of NewSpace markets and future space agencies explo-
ration missions.
NASA COTS programme has been created to meet the need of the agency to
access the ISS, reduce technology development costs and encourage the develop-
ment of a new type of vehicles that will serve both institutional and commercial
customers.
The COTS and CCDev programmes fulfil NASA needs for sending crew and
cargo to ISS and reduce their reliance on Russia for crew/cargo transportation
services. In order to prevent loss of revenues due to the space station retirement,
NewSpace companies should already start securing launch contracts for telecom-
munications, military and Earth observation satellites to be launched on board their
vehicles after 2021 and in this way enter into competition with traditional space
companies.
Both the demand growth for space tourist activities and basic and applied
research can be expected, the latter even overtaking in demand the space tourist
market. In view of the expected retirement of the ISS in 2024, space agencies may
turn to sub-orbital platforms for performing their microgravity experiments.
NewSpace companies may aim to develop this market first due to less stringent
requirements for flying payloads than space tourists. However, they may face
similar challenges in developing these markets as the ISS partners faced in the
20 1 Space Agencies Commercial Space Transportation Programmes
late 1990s, as will be further discussed in Chap. 6. While the potential growth of
microsatellite market using sub-orbital vehicles is still unclear, the expected growth
of 4% of the space tourist market may be sufficient to encourage the sub-orbital
industry development.
The launch success of SpaceX Falcon vehicle and Dragon capsule demonstrated
the potential of the COTS programme. A similar approach as the COTS-like
programme may be discussed in the long-term future for NASA Asteroid mission
to NASAs Innovative Lunar Demonstration Data (ILDD) programmes. The true
success of NASA COTS programme can be established only after the demonstra-
tion of safe, reliable and cost-effective sustainable space transportation capabilities
even after the lifetime of the International Space Station is over. This programme
encourages US NewSpace companies to enter on the international launch markets
and to compete with traditional space companies. NASA Flight Opportunities
programme provides chances for NewSpace sub-orbital companies to build flight
reliability, improve their technology and secure future customers. It also carries the
threat for potentially creating high market entry barriers for new players.
Falcon 9 and New Glenn offer competitive prices not only put under competitive
pressure traditional launch service provide, but put immense pressure on
Arianespace to be able to offer competitive low-cost launch services.
The market potential of commercial lunar markets is unknown and unexplored,
in spite of the fact that the interest in Google Lunar X Price is a positive indicator.
NASA issued a call for proposals in which commercial companies can offer to
NASA relay services to support future Mars missions, including landers and rovers
and, potentially, aerobots and orbiters.
The initiative above opens new business opportunities for NewSpace and tradi-
tional space companies which will bring benefits both to space agencies and
commercial companies.
The market evolution of commercial space transportation services will result in
economic spillovers in other industry sectors, such as information technologies, real
estate, manufacturing and others. The newly created markets will evolve in differ-
ent market structures, certain markets may resemble oligopoly while others monop-
oly, and therefore new entrants may be exposed to various high market entry
barriers. Furthermore, measuring the economic benefits from the NewSpace com-
panies activities will result in attracting institutional and private investments.
Chapter 2
Commercial Space Markets and Stakeholders
2.1 Introduction
This chapter presents and analyses commercial space markets of the past and the
present. The space economy is expected to become a multitrillion dollar industry in
the coming decades. With more than $13 billion (Thomas 2017) being invested in
the last 16 years in space-related start-ups and space companies, the new space age
has become a reality. Their classification and analysis makes possible a selection of
primary future commercial space markets of interest for NewSpace companies.
These are commercial space transportation markets, orbital and suborbital space
tourism, R&D commercial payloads (i.e. instruments, etc.), in-orbit satellite ser-
vicing, in situ resource extraction and space debris prevention. Stakeholders in
NewSpace companies (SpaceX, Blue Origin, XCOR, Armadillo Aerospace, etc.),
service providers (Space Adventures, Virgin Galactic, etc.), space agencies (NASA,
ESA, etc.), federations (Commercial Spaceflight Federation) and targeted cus-
tomers will also be discussed.
2.2 Background
Fig. 2.1 ISS, BEAM module, Dragon and Cygnus capsules docked to the ISS (Credits: NASA)
1
NanoRacks has installed on board the ISS the so-called NanoRacks CubeSat Deployer (NRCSD)
which is capable of holding six CubeSat units, allowing to launch 1U, 2U, 3U, 4U, 5U and 6U
(2 3 and 1 6) CubeSats. According to the material provided by the company until May 2016,
they have deployed from the ISS more than 100 CubeSats (NanoRacks 2016).
2.2 Background 23
Space agencies may also create programmes similar to the COTS model for
future Lunar and Mars exploration missions or space debris ones, resulting into
NewSpace companies starting to offer services to space agencies. Certain ISS
lessons, learnt by the space agencies when initiating MIR and ISS commercializa-
tion (Tkatchova 2013), could be considered by NewSpace companies when devel-
oping commercial space markets. NewSpace companies may also target R&D
markets (e.g. drug development, osteoporosis, etc.) or the entertainment industry
(e.g. space tourism) similar to the ISS R&D markets. The space start-up markets
will pass through the same phases of the development as the ISS markets.
The new kids in the block entering and creating new space markets and appli-
cations will be experiencing similar processes as the stakeholders faced in the early
days of ISS market evolution (Fig. 2.2). The phases of market evolution as
presented below are a natural for innovative products or services that are introduced
for the first time on a certain market. The space station services/products of the
Russian MIR station and of the early days of ISS commercialization in the mid- and
late 1990s passed through the phases below. Figure 2.2 presents the evolution of the
ISS markets versus space agencies investment in the ISS programme and market
development.
In the early days of ISS commercialization, the biggest challenge to the process
was the assumption that there is a market and its creation is easy as further
discussed in Chap. 3. Customers and markets are unknown and explored. The
diversity of the commercial space markets will pose a challenge to the companies,
as their customers will have different value chains depending on their industries
ISS programme
investment
Nascent Frenzied Turbulent Mature
Introduction Growth Maturity Sustain
Fig. 2.2 ISS market evolution vs. ISS programme investment (Tkatchova 2013)
24 2 Commercial Space Markets and Stakeholders
Describing and classifying commercial space markets is a difficult task due to the
diverse nature of commercial space transportation services offered by NewSpace
companies. Services range from orbital and sub-orbital crew and cargo transporta-
tion, in situ resource exploitation, 3D printing in microgravity to integrating R&D
payloads on board the space station. The diversity of the R&D research performed
on board the ISS by a wide range of sciences, from material science to biotechnol-
ogy and biological research, adds an additional layer of complexity in classifying
the ISS commercial space markets. NewSpace companies are bound to face not
only technological but also political and business management challenges. Here are
some of them:
Customers and markets are unknown and unexplored.
Diversity of the targeted commercial space marketscustomerswill have
different value chains depending on their industries (pharmaceutical, automo-
tive, mining etc.).
2
In the mid-1990s, it was believed that microgravity environment will contribute to improve
protein crystallization growth. Protein crystallization is the process of growing protein crystals
from a solution (19981999, 1999) and was observed and concluded that space-based protein
crystallization does not replace ground-based research, as it can add time, expense, and question-
able economic motivation.
2.4 Commercial Space Market Overview 25
Commercial space markets are user-driven markets where demand for space-
based services, products or payloads (e.g. experiments) is met by suppliers that are
either traditional or are NewSpace companies that offer a wide range of services/
products, e.g. from the use of satellite communications to navigation, Earth obser-
vation, launch or other services.
The creation of sustainable NewSpace markets is expected to generate afford-
able services for institutional and commercial customers. The question related to
the creation of self-sustainable markets has been further researched by various
authors, and the following stepping stones have been identified by Pittman
(2015):
1. Frequent, reliable and cheap access to LEO for crew and cargo
2. Vehicles capable of moving payloads and passengers beyond LEO to orbits
around other planetary bodies
3. In-space resource extraction and processing systems to provide materials needed
to support operations in cis-lunar space (CLS)
4. Resource depots in LEO and out in CLS to support asteroid and Mars missions
5. Established, reliable high bandwidth communication and navigation
6. Landers capable of landing people and equipment upon bodies with significant
gravitational fields
The milestones described above show a long-term vision for creating a sustain-
able NewSpace market environment that will also include in-orbit satellite servic-
ing, in situ resource extraction and other capabilities. At present NASA through its
COTS programme (see Chap. 1) has provided the opportunity for companies to
develop launch and transfer vehicles that will offer frequent, reliable and cheap
access to LEO. Nevertheless, once the milestone of frequent and cheap access to
LEO is achieved, as already mentioned in Chap. 1, NASA may implement other
future programmes similar to COTS for Lunar exploration. Considering vision and
the set milestones, the NewSpace markets could be grouped under several domains
for exploration: under interplanetary exploration (e.g. in-space resource extraction,
lunar/asteroid resource exploitation, etc.), orbital exploration (e.g. ISS utilization,
26 2 Commercial Space Markets and Stakeholders
Orbital Exploration
Sub-orbital Exploration
Space Ports
orbiting the Earth (NASA, Space Debris and Human Spacecraft 2013), the importance
of providing in-orbit satellite services and space debris markets will evolve rapidly.
In-orbit satellite servicing is about the need to repair and refuel LEO or GEO
satellites in order to extend the lifetime of the satellites and their services. The expected
benefits of future in-orbit satellite service missions will aim at demonstrating the
ability to create new space systems at greatly reduced cost for end users. Technology
demonstration missions for both LEO and GSO satellites are being explored and on
board the ISS are being studied by space agencies. This transversal market segment is
in a nascent stage of market development. In spite of that, the technology success
combined with expected value may result in the introduction of in-orbit satellite
servicing disruptive technology that may quickly evolve in a new commercial market.
Space debris growth has become a concern in recent years since collisions at
orbital velocities can become highly damaging to functioning satellites. The
expected launched of broadband satellite constellations, such as OneWeb 720 sat-
ellites, Boeing 2960 satellites, SpaceX 4000 satellites and Samsung 4600 satellites,
will inevitably result into increase of space debris. As by today in 2017, satellites
are not designed to be repaired.
Moreover, space stations produce even more space debris following the Kessler
syndrome, and the amount of debris and debris impact escalates (Baldesi 2011). The
need to address this concern is rapidly pushing space agencies to find solutions for space
debris avoidance, removal and prevention. Certain space agencies, such as ESA, are
looking at implementing space debris active removal missions that will offer opportu-
nities to European companies to create new services and markets (ESA 2016a, b, c).
Both space debris markets and in-orbit satellite service markets carry the long-
term promise of growth and creation of new services for space debris removal and
mitigation and in-orbit satellite servicing.
In situ resource extraction is a new emerging market and is about mining
asteroids for space resources or the production of rocket propellants derived from
the ice situated on the lunar poles. Certain European countries like Luxembourg even
announced the creation of a legal framework and regulations in the context of future
ownership of minerals extracted in space from Near-Earth Objects (NEOs) such as
asteroids (Resources S. 2016). This creates the opportunity for US-based NewSpace
companies to settle in Europe and create European in situ resource extraction
markets. The technologies and solutions developed for the in situ resource extraction
markets will be of critical importance for future Lunar and Mars missions.
The diversity and interdependence between different markets creates challenges
in describing and mapping the future NewSpace markets.
Some NewSpace markets seem more developed than others which are still in an
emerging state. Identifying promising NewSpace markets will be a complex task
since their growth depends not only on the encouragement of space agencies
programme but also on the technology maturity of their vehicles and the upcoming
2.5 Criteria for Classifying Future NewSpace Markets 29
COMMERCIALIZATION CHASM
Proven HIGH TRL w private industry involvement -
Technology usually technology demonstrations Industry
ld
or
lW
OBJECTIVE: What is the industry-
ea
specific infusion point for microgravity
R
related discoveries?
/
ion
u lat ping
m y
Si otot
University Pr
Lab
Basic
Principles
System/Subsystem Prototype
Analytical or Experimental
Prototype Demonstration
Application Formulated
Component Validation
Observed & Reported
Proof of Concept
Basic Principles
Product Proven
In Real World
In Real world
In Simulation
In Simulation
TRL 1
TRL 2
TRL 3
TRL 4
In Lab
TRL 5
TRL 6
TRL 7
TRL 8
TRL 9
Fig. 2.4 ISS R&D market Commercialization Chasm (Rasky 2014)
flight opportunities of space agencies. For example, in the context of the ISS R&D
markets, the potential of microgravity research and accessibility and the successful
ISS operations have resulted in developing the ISS R&D markets and the Com-
mercialization Chasm in the context of NASA TRL (Rasky 2014) (Fig. 2.4).
The high TRL of the technology development is a prerequisite for industry
involvement. However, the earlier involvement of industry players in the technology
development of orbital and sub-orbital space transportation vehicles in the NewSpace
markets is evident. This trend is a result of the successful implementation of the NASA
COTS programme as well as of the need to develop and provide NewSpace services
that meet the requirements of future customers, as is the case of sub-orbital vehicle
developments. Therefore, it is important for future commercial space stations com-
mercial customers to be involved in the early stage (Phase A) of the space experiment
facility design. A comparison with ISS commercialization along this line will show
that NewSpace companies are already involved in the early stage of TRL development
and, parallel with it, in the market identification and fundraising. The diversity and
complexity of NewSpace markets pose a challenge for their classification.
Yet, the following initial criteria for monitoring the evolution of future markets
may be used for classifying them:
30 2 Commercial Space Markets and Stakeholders
Commercial space markets are the markets in which NewSpace companies offer
services, solutions and products to customers who pay a certain price for using these
products, services and solutions. NewSpace companies offer interesting solutions
for in situ resource extraction, crew and cargo orbital and sub-orbital transportation,
3D printing in microgravity and CubeSat launches from the ISS. The diversity of
the services and technology solutions developed by NewSpace companies will
result in primary and secondary market sectors and development of new space
applications (Fig. 2.5).
The targeted markets will have increased interdependencies which could result
in the emergence of transversal market segments like the ones referred to as R&D
markets, in-orbit satellite servicing, space debris growth and in situ resource
extraction. Markets evolution could be unpredictable, and certain primary targeted
markets, like space tourism for sub-orbital flights, could become secondary in
priority, while others, like R&D markets, could become primary. The description
of markets, stakeholders and future trends in their market evolution will be dwelt
upon later in this book. With the future evolution of these markets, there will be a
need for further research of the interdependencies between the orbital, sub-orbital
and spaceports segments, the primary and secondary market segments and the
transversal ones. The market features and challenges experienced in certain markets
may transfer or may be even similar to the ones experienced as in the interrelated
markets. For example, certain pharmaceutical companies working on R&D exper-
iments, to be flown on board the ISS, may consider initially testing their experi-
ments on board sub-orbital vehicles.
Fig. 2.6 NASA NewSpace developments (NASA, Emerging Space, The evolving landscape of
21st Century American Spaceflight 2015b)
32 2 Commercial Space Markets and Stakeholders
2.8 Conclusions
NewSpace companies face challenges and complexities similar to the ones space
agencies and companies faced in the early days of ISS commercialization. For
example, the biggest challenge to the process was the assumption that there was a
market and its creation was easy, or future customers could find the development
and launch of R&D experiments too long, which would not permit them to
introduce the product on the market quickly enough, or, in other words, the time
to market may be too long for commercial customers to wait. Thus, non-space
customers may encounter difficulties to understand the benefits of microgravity and
the complexity of developing, certifying and launching R&D payloads to the space
station. Commercial space markets are user-driven, quite dynamic and with a
diverse portfolio of services and different levels of market maturity. They could be
grouped into four groupings: interplanetary, orbital, sub-orbital exploration and
spaceports. The criteria used for the market grouping could be whether a certain
service/solution addresses a certain gap, sufficient technology maturity,
34 2 Commercial Space Markets and Stakeholders
3.1 Introduction
3.2 Background
Commercialization of space technology started initially with ideas for the commer-
cialization of the Space Shuttle in the early 1980s, followed by the launch of
commercial projects under the Russian MIR space station programme and the
set-up of ISS commercialization programmes in the late 1990s.
Space agencies had different reasons to initiate space technology commercial-
ization. NASA was driven by the opportunity to make cost savings, due to cheaper
spacecraft hardware production, and boost the creation of a competitive space
industry with new actors offering commercial space transportation services
(SpaceX, Bigelow, etc.) and modules (Spacehab). Roscosmos was driven by the
need for cost recovery in order to keep the MIR operational, with annual operating
costs of around $240 million per year.
In addition to the Space Shuttle, MIR and ISS commercialization lessons, there
are also several lessons to be learnt also from the activities taking place in the
emerging sub-orbital space industry.
Interplanetary Exploration
Orbital Exploration
Sub-orbital Exploration
Space Ports
The Space Shuttle, launched in the early 1980s, was conceived and developed as a
reusable vehicle for servicing and repairing satellites and performing experiments
in low Earth orbit (LEO). Five Space Shuttles were built and used not only for
microgravity experiments but also for performing in-orbit satellite servicing mis-
sions and for constructing the ISS. The Space Shuttle had a bay where satellites
could be positioned and repaired by its robotic arm. Today, without the Space
Shuttle, we would not have discovered new galaxies and seen the amazing images
made from the Hubble space telescope. When the Hubble telescope was launched, it
turned out that there were major problems with the Hubble mirror that needed to be
resolved by in-orbit repair of the corrective optics. The first mission in 1993
(STS-61) demonstrated the importance of in-orbit satellite servicing, followed by
four servicing missions STS-82, STS-103, STS-109 and STS-125. The in-orbit
satellite servicing of the Hubble demonstrated capabilities, although it would have
3.3 Space Shuttle Commercialization 37
been cheaper1 to launch a new Hubble telescope than rather service it. In 2016
satellites are not being constructed to be serviced. In the long-term future, private
companies may start exploring the possibility of performing in-orbit satellite servic-
ing for space agencies, science or Earth observation missions and commercial
satellite operator missions (Fig. 3.1).
Space Shuttle commercialization has always been related to the activities of the
Spacehab module, which used to be a commercial module positioned in the Space
Shuttle cargo bay, offering 28.3 cubic meters of expanded space for experiments.
Spacehab flew on STS-96, STS-101 and STS-106 and could host 61 mid-deck
lockers. During the first flight of Spacehab, the prime customer for its services was
NASA. In the early 1990s, the company managed to sign an agreement with NASA
for USD184 million and managed to raise up to USD200 million for its activities.
However, it spent USD150 million on the design and the manufacturing of two
Spacehab modules that would fly on the Shuttle. An independent cost analysis
demonstrated that if NASA was going to design and manufacture these two
modules, the cost would be in the range of USD1.2 billion (Fig. 3.2).
The analysis showed that private companies should have a good understanding
of their customers needs if they wanted to design and manufacture space
1
With a cost around $1 billion per Shuttle mission.
38 3 Commercialization Lessons
The idea behind the Industrial Space Facility was to have a small microgravity
platform that would host up to 31 payload racks. The ISF will be an unmanned
facility, will be serviced by the Space Shuttle and will be positioned in a lower earth
orbit of 300 km and with Space Shuttle docking capability. The operational costs
for the ISF would be carried by private companies, and it is considered by NASA as
complementary to the ISS and the Shuttle programme. In the late 1980s, the
3.4 Space Station Commercialization Lessons 39
company proposing the ISF did not manage to attract enough private customers to
fly their experiments on board the ISF and tried to get a lease agreement with
NASA. The leasing agreement would have cost around $140 million over 5 years
for 70% of the first ISFs payload space. The idea was to enable the company to
raise around $250 million from the private sector for building the ISF hardware
(Astronautix, Industrial Space Facility). However, the actual lease was subject to
availability of future funding.
With difficulties to attract private companies to fly their payloads on board the
ISF, NASA became the prime customer of the ISF. In the face of the Space Shuttle
rising costs and the expected leasing costs of $700 million, fears arose in many
representatives of the space science subcommittee that the NASA budget will
increase. The cost of the lease would almost equal NASAs investment in micro-
gravity research for the same period. For NASA the cost would have been quite
high, due to the fact that the ISF did not attract enough private payloads to be flown
on board the ISF and it turned out that NASA would be its prime customer.
In addition, Spacehab complained that NASA will use the ISF facility rather than
their platform. NASAs costs for Spacehab were less, as it will pay $28 million for
each six flights including transportation costs (Universe) and would also lease up to
50 payloads on the Space Shuttle. However, the ISF would have enabled long-term
microgravity experiments, while Spacehab could only support experiments for a
few weeks during a Shuttle flight (Fig. 3.3).
The market for microgravity experiments financed by private companies was too
small to attract a sufficient number of commercial payloads to be flown on the ISF.
The cost impact on NASA budget, as the sole customer for both the ISF and
Spacehab, in combination with ISS programme commitment and Space Shuttle
costs was too high.
Fig. 3.3 Industrial Space Facility (Credits: NASA via Marcus Lindroos)
40 3 Commercialization Lessons
The ISF was exposed to too many risks of political, budgetary and market nature,
considering its early arrival on the market for microgravity research and the
reliance on a single governmental customer. The ISF facility could have been
initially the platform for flying R&D experiments of pharmaceutical, biotechnology
or medical devices companies. The successful development of the ISF could have
been a test platform for full ISS utilization and earlier R&D ISS market develop-
ment. In 2001 it could realistically permit the ISS partners the opportunity to
actually attract mature R&D customers to fly microgravity payloads on board the
ISS. Furthermore, with the expected retirement of the ISS in 2024, it was possible
that NASA can revive the idea for an ISF in LEO and private companies may
design, construct and operate similar to the ISF facility. NASA may even set up a
programme similar to NASA COTS and Lunar Catalyst programmes. The major
lesson to be learnt from the ISF experience is that they did not manage to clearly
define their unique selling point and failed to attract a sufficient commercial
customer base in order to become an attractive concept for NASA.
When the MIR station was launched in 1986 by the Russians, it became not only a
symbol of Soviet space engineering but also of international cooperation under the
Interkosmos programme. During its lifetime it hosted more than 104 cosmonauts/
astronauts from 15 countries and offered opportunities to countries like Bulgaria,
Hungary, Cuba and Poland to fly their own experiments on board the station.
In the early 1990s, most ex-communist countries from Central and Eastern
Europe woke up overnight in the new world of new democratization processes or
the so called world of free market economy. Centralized economies came to an
end. The economic changes lead to radical industrial restructuring, high unemploy-
ment and national currency inflation. The inevitable transition to free market
economies lead to the abrupt shrinking of space industry activities in many
ex-communist countries. Russia woke up with a space laboratory in orbit, and the
MIR annual operating cost running between $220 million and $240 million
(Astronautix 1997). For its 15-year-long lifetime, the total cost of operations of
the MIR space station amounted to between $3.3 billion and $3.6 billion. Clearly,
finding funding for the MIR annual operating costs in an economy of transition
became mission impossible for the Russian government.
Drastically reduced space budgets, economic stagnation, high inflation of the
national currency, low interest to work in the space industry combined with low
salaries and high MIR operational costs forced the Russian space officials to initiate
commercialization of space technologies.
Overnight the Russians had to become pioneers in the commercialization of
space technology, to quickly identify new markets and to quickly attract customers
for space entertainment projects. The MIR station became the first to host for 6 days
the Japanese journalist Toyohiro Akiyama, thus demonstrating for the first time the
3.4 Space Station Commercialization Lessons 41
agreement for leasing a commercial space station, to attract private funds to finance
the launch of the Soyuz TM-30 on the 4th of April 2000 with two cosmonauts on
board, Sergei Zalyotin and Alexandr Kaleri. Their mission marked an important
milestone in spaceflight by being not only the first one to be financed by private
funds but also by reviving the dormant MIR space station. MIRCorp managed to get
involved with NBC for the set-up of a reality show called Destination MIR and
also signed up the first commercial space tourist Dennis Tito who flew on board
the ISS.
As pioneers and creators of a number of exciting projects, MIRCorp took by
surprise space agencies by initiating a business model based on a well-defined
unique selling proposition, backed by private capital and governmental provision of
a space laboratory. But its glory did not last long as the ISS partners put political
pressure on the Russian space agency to de-orbit the MIR space station, in order
that the Russians meet their ISS commitments without delays. MIR could have been
considered by certain ISS partners as a potential threat to ISS utilization, as
non-space companies could initially have flown their payloads to MIR rather than
to the ISS. MIR Corp flew Denis Tito on the ISS, but after the MIR de-orbiting the
company reduced its activities.
The knowledge and historical competence generated during this period helped
the CEO Jeffrey Manber to create in 2008 the NanoRacks, a company famous for
deploying CubeSats from the space station by providing low-cost and standard
hardware for payload integration. NanoRacks realized that the ISS is underutilized
and that they could integrate several cubeLabs in a mid-deck locker (MDL). They
signed with NASA a SAA agreement and focused on offering their customer rapid
delivery of their payloads to the ISS. In a similar way as in the case of MIRCorp,
they became pioneers in the domain of the launch of small payloads integration and
took NASA by surprise.
Some MIR commercialization projects were successful, others just stayed as
feasibility studies. For example, in 1997, Boeing showed an interest in creating a
venture for offering integration, launch and operations services for external exper-
iments on Spektr. The idea was that the project should eventually market test
service provision for ISS. Boeing had approached between 75 and 100 companies
to study (Studies 1997) their interest to use their payload integration services for
external payload integration at a price of $7 million and lead time into space of
1215 months. The market study found some interesting conclusions: for example,
that the price of $7 million is too high and customers are ready to pay around $35
million, that customers require short-lead times of 7 to 8 months maximum and that
proprietary customer information is perceived as being at risk on a MIR mission.
The conclusions show clearly that 20 years earlier certain space agencies and
companies already knew of the challenges facing the commercial projects on
board space stations experience. The question could be asked whether the ISS
3.4 Space Station Commercialization Lessons 43
partners were aware of these results at the time of setting their ISS commercializa-
tion policies around 2000. ESA conducted a number of studies to gather user
feedback before setting up its ISS commercialization policies, and the results of
these studies came to a similar conclusion: there was no understanding of the
benefits which microgravity research could bring to their pharma or biotechnology
experiments. Another conclusion from these studies was that non-space R&D
customers wanted much shorter time to market lead times for designing, devel-
oping and flying their payloads to the space station.
It is likely that the services provided by NewSpace companies will have high
prices at first, before the markets have developed and generated economies of scale.
Furthermore, NewSpace companies should be able to quickly integrate the R&D
payloads; companies providing payload design and integration should be able to
develop these payloads in short lead times, probably within less than a year, and be
in a position to provide guarantees to companies to protect their IPR rights. Clearly
the success of a company like NanoRacks demonstrates the critical importance of
short lead times for the development and integration of payloads on board the
station and competitive cost-effective prices.
This is the case of Spacehab that designed and manufactured two Spacehab
modules to fly on the Shuttle for a price of $150 million, rather than for the $1.2
billion if NASA were to design and manufacture them. Or the example with Falcon
9, of which NASA produced a study of the cost assessment and proposed two cases:
the development of Falcon 9 under traditional NASA environment and the
second one, developed in a commercial environment. The study2 demonstrated
that the Falcon 9 would cost $3.9 billion based on NASA environment and around
$1.6 billion in a commercial environment (Policy 2011).
The attempts to commercialize MIR encouraged the ISS partners to think about
setting commercialization policies, defining ISS services and prices and creating
customer-friendly conditions.
MIR commercialization achieved many firsts like tapping into the unknown
markets of space-based advertising and space tourism, attracting considerable
private capital for launching two cosmonauts to the station and attracting the first
space tourist.
MIR commercialization demonstrated how national space agencies and indus-
tries should behave in case of drastic political changes that lead to insufficient space
budgets. The processes that took place in Central and Eastern European countries
demonstrated to space agencies the need of building up contingency plans to save
space budgets. It also demonstrated the critical importance of defining the direct
and indirect benefits from space-based projects and experiments on board space
stations. Since space stations are multidisciplinary laboratories and attracting first
time customers for performing early R&D is quite difficult, space agencies owning
modules from the space laboratories could set up commercialization programmes
not only for encouraging the development of a competitive space transportation
2
The study used the NASA NAFCOM model to perform the cost estimate simulation.
44 3 Commercialization Lessons
industry but also for sharing costs with industry in order to achieve considerable
savings.
MIR commercialization has established the basis for initiating ISS commercial-
ization, thus demonstrating the importance of changing the paradigm by involving
both the public and private stakeholders. Fifteen years later this process seems to
have brought many opportunities to non-space companies for performing R&D
research in microgravity and performing a number of experiments.
The question that arises is whether NewSpace companies will learn in the
lessons learnt from MIR and ISS commercialization. Can commercial utilization
be successful if government programmes alone provide the incentive for non-space
companies to fly their own experiments on board commercial space stations?
3
ISS resources include facilities and services, such as the Fluid Science Laboratory (FSL), the
Material Science Laboratory (MSL), Biolab or the European Drawer Rack (EDR).
3.4 Space Station Commercialization Lessons 45
4
Osteoprotegerin activity on animals and humans is regulated by gravity.
46 3 Commercialization Lessons
3.5 Conclusions
One of the lessons learnt from the Spacehab case study was that full reliance on one
governmental customer gives power to define contractual conditions. Therefore,
NewSpace companies that aim at building future commercial inflatable modules
(Bigelow) or at constructing commercial ones, like the Axiom , should be aware of
the hidden strategic risk of having a single prime governmental customer with
strong purchasing power. They will have to identify targeted markets and aim at
diversifying their customer base in order to avoid dependency on a single prime
governmental customer.
3.5 Conclusions 47
The lessons learnt from space station commercialization under orbital explora-
tion and from the sub-orbital industry will provide valuable recommendations for
NewSpace companies that are developing projects for in situ resource exploration,
sub-orbital vehicles and operating commercial spaceports.
Major conclusions can be drawn from the ISF experience that they failed to
define their unique selling point clearly as well as to attract a sufficient commercial
customer base in order to become an attractive concept for NASA.
The ISF facility could have been initially the platform for flying R&D experi-
ments of pharmaceutical, biotechnology or medical devices companies. Its success-
ful development could have been a test platform for full ISS utilization and earlier
R&D ISS market development. Realistically permitting the ISS partners in 2001 to
actually attract mature R&D customers to fly microgravity payloads on board
the ISS.
In all, MIR commercialization has set up the basis for initiating ISS commer-
cialization and demonstrated for the first time in the history that new market
opportunities could be created and exploited in the context of space station
commercialization.
The following questions arise: can the combined MIR and ISS commercializa-
tion experience offer lessons to NewSpace companies regarding the long-term
commercial utilization of future space stations? Is it only government programmes
that will provide incentives to non-space companies to fly their own experiments on
board commercial space stations that can ensure the success of the commercial
utilization?
Space agencies procured a number of studies analysing the potential benefits,
opportunities, stakeholders roles and markets. Certain studies made a number of
recommendations regarding NASAs role: to develop commercialization goals, to
shift NASA infrastructure to private partnership and to provide advice to commer-
cial venture and formulate plans, strategies and policies for the achievement of
commercialization goals.
In summary in the mid-1980s and 1990s, the demand from commercial cus-
tomers to fly microgravity experiments was very low and insufficient to justify the
existence of both the ISF and Spacehab modules. Nevertheless, the successful
attempts of the Russians to commercialize MIR demonstrated the commercial
opportunities for space advertising and promotion campaigns. Today, almost
20 years after the first ISS commercialization activities, the microgravity R&D
markets are developing successfully, and private companies like NanoRacks are
integrating R&D experiments on board the ISS, while companies like SpaceX are
providing commercial cargo transportation services to the ISS. The above attests to
the successful evolution of NewSpace companies activities. In todays environ-
ment, space agencies are expanding their role in encouraging commercialization
activities for the successful emergence of a NewSpace industry and partnering with
NewSpace companies for the successful evolution of a NewSpace industry.
Chapter 4
Interplanetary Settlement and In Situ
Exploration
4.1 Introduction
Since the last Apollo 17 mission in 1972, interplanetary human spaceflight has been
on hold due to various political and budgetary reasons. Even at the time of Apollo, it
was a struggle to justify the direct financial return on investment, and politicians
were unable to sustain the lunar exploration missions. Nevertheless, the global
impact of the Apollo missions has never been forgotten. Many questions are asked
today in this connection: Why has humanity not returned to the Moon? Why has a
permanent human outpost not been constructed on the Moon? How can NewSpace
companies contribute to taking humans to the Moon? Why has humanity waited for
so long to exploit resources on the Moon and on asteroids or other near-Earth
objects (NEO)? More questions sprang up in connection with Mars research: Is a
future human spaceflight to Mars feasible? How can private initiatives and existing
commercial space transportation vehicles contribute to Moon and Mars settlement
bases? What are the economic benefits from exploiting in situ space-based
resources?
Interplanetary exploration is about long-term Moon and Mars human spaceflight
missions and in situ resource exploitation from the Moon or NEO. Asteroids could
contain iron, cobalt, manganese, nickel, aluminium and titanium, while lunar water
ice could be extracted and broken into oxygen and hydrogen for rocket propellant
(Energy 2016). The extracted iridium, silver, osmium, palladium, rhenium, rho-
dium, ruthenium and tungsten from the asteroids may be used for potential transport
back to Earth (Government 2016). In situ resource utilization will involve any
hardware or operation1 that harnesses and utilizes in situ resources to create
products and services for robotic and human exploration (Sanders 2016).
1
ISRU operations will include activities like resources assessment, resources acquisition, resource
processing, in situ manufacturing, in situ construction and in situ energy.
4.2 Stakeholders
Lunar, Mars and in situ resource exploration will attract a wide community of
visionaries and entrepreneurs in the nearby future. National governments will set up
national space programmes and develop legal and regulatory frameworks to
encourage lunar and in situ exploration. NewSpace companies, like Planetary
Resources, Deep Space Industries like Shackleton Energy Company and Moon
Express will be attracted, initially acting as manufacturers/operators. Traditional
space companies may begin offering products and space engineering services to the
companies, involved in setting up initiatives like Mars One (Fig. 4.1).
In this new paradigm, space agencies could become prime customers for the
services provided by NewSpace companies, while traditional and NewSpace com-
panies can cooperate and compete at the same time (Table 4.1).
There are governments that may be interested in encouraging and supporting in
situ space resource exploration in a similar way as in the USA, namely, by setting
up legal and regulatory conditions to attract NewSpace companies to perform their
activities. However, without initial seed funding and governmental programmes to
invest in development and maturing of the technology solutions necessary for in
situ resource exploitation, many of these concepts may remain just on paper. In
order to set up these programmes, national governments will need clearly to assess
4.3 Interplanetary Settlement 51
the direct and indirect benefits from in situ space resource exploitation. Research
programmes should also be established to support NewSpace companies to deal
with the challenge of developing new markets and at the same time to invest in
launching vehicle development.
Public debates about initiatives, like Mars One, Google Lunar X Prize and SpaceX
vision for a Mars Colonial Transporter, have initiated a real debate about the
importance of interplanetary exploration. The Mars One vision for setting up a
one-way mission to Mars, with astronaut selection and preparations in a simulated
Mars base to be broadcasted worldwide to be viewed by the public, has triggered
worldwide publicity and discussion (Tkatchova 2012) (Fig. 4.2).
The Mars One mission will be realized in different phases starting with crew
selection, demo comsat and rover launch, followed by cargo missions before the
crew launch. The strong publicity the mission received globally has demonstrated
52 4 Interplanetary Settlement and In Situ Exploration
keen interest all over the world as well as the need for interplanetary exploration.
Mars One claims to have received around 202,586 applicants, from whom to select
50 women and 50 men to participate in the first crew to Mars (MarsOne 2015).
Many consider the mission initiative as the only viable way to reach Mars. Mars
One raises a question concerning the role of commercial exploration missions in the
global exploration roadmap of space agencies. It has also demonstrated the poten-
tial for gaining public attention, by bringing together the dream for interplanetary
4.4 In Situ and Planetary Resource Exploitation 53
space exploration and commercial objectives for private venture capital2 raised for
space exploration.
Elon Musks vision for a completely new architecture of a future Mars mission
has also attracted public attention. Long-term Mars missions could be the potential
way for creating a self-sustainable market for the Falcon Heavy launcher. Private
space companies may have various visions for future long-term space exploration
that are driven by the need for long-term sustainability of their emerging commer-
cial space transportation markets. The retirement of the ISS in 2024 may endanger
the sustainability of the present commercial space transportation markets. There-
fore, the work to promote interplanetary space exploration missions may become a
long-term roadmap to be pursued by NewSpace companies.
Politicians will be reluctant to invest in future Mars space missions due to fears
of the high costs of these missions and of the difficulties to present direct short-term
benefits from future Mars missions. Therefore, private companies involved in
developing and promoting future Mars missions will have to fully rely on private
financing and to develop sound business cases in order to attract long-term
financing.
Interesting developments are taking place in the institutional aspect. The utilization
of in situ resources for creating new products or services may even lead to the
increased importance of 3D printing for future human missions for Moon or Mars
missions. Certain near-Earth objects (NEO) contain precious metals like platinum,
palladium and rhodium, which are rare and costly on Earth but are used in
2
On December 12, 2016, Mars One announced that it secured an investment of 6 million euros
from a Hong Kong investment fund and is trading publicly its stocks at the Frankfurt stock
exchange (MarsOne, Mars One now trades publicly and closes 6 million euros funding 2016b).
54 4 Interplanetary Settlement and In Situ Exploration
electronics (Liesebeth Beneder 2016). Metals such as iron and zinc from asteroids
could be transferred to Earth or be potentially used for space station construction.
In the last 2 years, two countries, the USA and Luxembourg, became famous for
the efforts to set legal frameworks which offer opportunities to private companies to
exploit space-based resources from other celestial bodies. The USA first approved
the space mining bill, referred to as the Space Resource Exploration and Utilization
Act of 2015. Basically, it encourages the commercial exploitation of space-based
resources, permits the development of economically viable industries dealing
with space resource exploitation and promotes US companies (Space Resource
Exploration and Utilization Act of 2015, 2015).
The Luxembourg government has set up public initiatives for creating legal
frameworks to protect their rights to resources they extract i.e. resources from
4.5 Lunar Exploration 55
asteroids (Government 2016). This marks a new era in commercial space explo-
ration (Fig. 4.3).
Besides legal frameworks, Luxembourgs strong interest is demonstrated also by
the signing of a memorandum of understanding for cooperation together with the
banking institution Societe Nationale de Credit et dInvestissement (SNCI) and
the Silicon Valley-based asteroid mining company Deep Space Industries (DSI) for
cooperation in the context of exploration, use and commercialization of resources
from near-Earth objects (NEO), such as asteroids.
The national R&D space programme LuxImpulse will co-fund R&D projects
and use financing instruments from the SCNCI (Cluster 2016). There is even an
idea for Deep Space Industries to build a CubeSat mission called Prospector-X,
which will have cameras on board to observe asteroids that pass nearby Earth.
This initiative is expected to bring twofold benefits. On the one hand, it will
attract private US-based NewSpace companies like Planetary Resources, Deep
Space Industries, Shackleton Energy Company and many others. On the other
hand, it will encourage the transfer of space engineering knowledge and develop-
ment of national engineering competencies in CubeSat mission development. These
are competencies which will later permit Luxembourg not only to build their own
CubeSats but also be an active contributor to ESA Small Mission Initiatives.
Clearly the Luxembourg initiative could be considered a well-thought national
policy to attract US NewSpace companies to spin in their knowledge into future
European space missions. At the same time, Lux companies will be learning from
the US companies how to design, construct and test small spacecraft like the
Prospector-X telescope one.
Nevertheless, companies involved in ISRU projects will need to have viable
business cases with targeted end-users.
Companies involved in asteroid mining may look at the profits of terrestrial
mining. The terrestrial mining industrys annual growth rate of 8.5% (NASA
2014b) may seem attractive to NewSpace companies, but will they be able to pull
private infrastructure financing and generate sufficient profit to achieve return of
investment? Will they be able to have sustainable business models that will support
them in their activities? In the long run, will they be able to generate similar growth
rates as in the terrestrial industry? How far would the price of rare metals drop if the
market is flooded with cheap material from asteroids? Would the resulting price
be sufficient to keep the business going? How long would it take to earn back
investments in a lunar or asteroid mine?
interplanetary exploration. Russia,3 Japan,4 China5 and India6 are also looking at
lunar robotic exploration missions, yet they have not explicitly indicated that these
future missions will involve commercial lunar exploration.
NewSpace companies are starting to investigate possibilities to provide com-
mercial logistics delivery services beyond LEO. The Blue Origin company has
declared interest to invest their competencies in the development of a Blue Moon
system and a lunar lander system, as part of a partnership with NASA.
In 2016 the US government granted to Moon Express the permission for the first
commercial lunar landing in 2017. The permission does not come as a surprise
bearing in mind that for the last couple of years successfully implementing the
NASA Lunar Catalyst programme (see Sect. 4.7) in which the agency is
cooperating with private companies for developing new competencies. The USA
does not only encourage US companies to perform commercial lunar exploration
but also conducts feasibility studies addressing questions related to commercial
lunar exploration. In 2015 NASAs emerging space office partially funded a study
under NextGen Space LLC about the Economic Assessment and Systems Analysis
of an Evolvable Lunar Architecture that leverages commercial space capabilities
and public-private partnerships. The studys primary research question is whether
America could return humans to the Moon, and ultimately develop a permanent
human settlement on the Moon by leveraging commercial partnerships within
NASAs existing deep space human spaceflight budget of $34 billion per year.
(Charles Miller 2015). One of the findings of the research team is that under the
COTS experience, a human return to the Moon may not be so expensive if there is a
commercial lunar base. A commercial lunar base may potentially pay for its
operations by exporting propellant to lunar orbit for sale to NASA, and in addition
there could be public benefits from building a commercial industrial base on the
Moon. Thus, national space agencies could become major customers to a commer-
cial lunar base. The observations of the authors of the Economic Assessment and
Systems Analysis of an Evolvable Lunar Architecture (ELA) (Charles Miller 2015)
are summarized below (Hall 2016):
Based on NASAs experience with COTS, a human return to the Moon may not
be so expensive as previously thought.
3
Russia is planning to rebuild the Russian Lunar lander robotic capability and perform five lunar
missions in which four lunar landers are included. The Russians are planning to launch the Luna-
26 orbiter and Luna-27 rover to the lunar surface and in 2024 launch Luna-25 Lander.
4
Japan is planning to launch by 2019 the SLIM mission and by 2022 the Selene-2 mission with an
orbiter, lander and rover on landing on the surface of the Moon.
5
The Chinese are working on a first robotic Moon lander that is supposed to be a precursor to a
manned lunar module that would carry Chinese astronauts to the Moon around 2030. Certain
authors report that the six Chang landers are being designed and builttwo landers each with
rovers, and as many as four other landers to complete two missions that would each bring back to
Earth 2 kg of lunar rock and regolith (Covault, November 2013).
6
India is planning to launch the Chandrayaan-2 mission with an orbiter, lander and rover.
4.5 Lunar Exploration 57
The Moon village will be a result of the international collaboration between space
agencies worldwide and possibly the industry. It will be utilized for R&D, science,
technology testing, resource mining, business and other applications. The idea was
clearly described by ESA Director General Jan Woerner (Woerner 2016). He
explained in an interview that the Moon village will help combine international
competencies in human and robotic space exploration, and astronauts will work in
different fields beyond sciences, like business ventures, mining or tourism. In the
concept, the inflatable modules and 3D printing processes will be used to produce
multiple parts from lunar soil for shelters against micrometeoroids and space
radiation (ESA, Building a Lunar Base with 3D printing 2013a) (Fig. 4.4).
The Moon village will build upon the space agencies historical and future lunar
competencies, like the ESA Smart-1 mission, Russias Lunokhod Programme,7
Indias Chandrayaan-1 lunar mission and, of course, the unique heritage of
NASAs Apollo mission. ESA member states like Luxembourg may get actively
involved in international projects and gain robotic competencies from Japanese
companies like the Ispace one, which will develop a micro-robotic system to locate
and extract water from the lunar surface.
The Moon village concept could also benefit from technology solutions
developed by current NASA programmes like the NASA Lunar Catalyst
programme and technologies as the BEAM module developed under the SAA
7
Lunokhod-1 landed on the Moon in 1970 and Lunokhod-2 in 1973.
4.5 Lunar Exploration 59
agreement. Further on, NASA has continued to explore through its NextStep
programme8 the possibility of using the inflatable habitat innovation to support
future human spaceflight Moon and Mars missions (Aerospace 2015). Under the
NextStep programme, NASA hopes to attract NewSpace companies, like Bigelow,
to work on technology developments that potentially lower the cost of building
deep space habitats. NASA will also seek to develop habitats that will contribute to
future Moon log duration missions, with capabilities in tele-operations, robotics, in
situ resource utilization and other areas which will be discussed in section In Situ
and Planetary Resource Exploitation (Fig. 4.5).
European companies may have the opportunity to partner with NewSpace
companies and become involved into technology innovation at their own expense
thus learning more about building inflatable habitats without NASA funding.9
Primarily, this could act as a stopper for traditional space companies, used to
work on long-term contracts with national space agencies. However, it could also
be an opportunity for European companies to spin-in in Europe unique knowledge
on building and operating inflatable habitats.
ESA will need to perform an analysis whether it will benefit from cooperating
with Russia on future lunar missions or with the Chinese. Following up on the
8
NASA NextStep programme is a programme considered by NASA as a public-private partnership
for partnering with industry in the commercial development of deep space exploration capabilities
to support more extensive human spaceflight missions in the proving ground around and beyond
cislunar spacethe space near Earth that extends just beyond the moon (NASA, Next Space
Technologies for Exploration Partnerships-2 (NextSTEP-2) BAA Synopsis 2016d).
9
Foreign companies could be eligible partners under US-led consortium but must comply with the
Guidelines for Foreign Participation which will require no exchange of funding.
60 4 Interplanetary Settlement and In Situ Exploration
10
It has been reported that Roscosmos will spend 7.5 million $ on this study (Writers 2016).
4.5 Lunar Exploration 61
The creation of a Moon village might attract private companies that will perform
R&D research or extract lunar ice for producing rocket propellant or use lunar sand
for the construction of lunar modules. The creation of a post-ISS lunar laboratory
for performing R&D research and offering opportunities to companies to perform in
situ resource exploitation and 3D printing on the Moon could attract commercial
customers. Furthermore, pharma, biotech, material science and medical device
companies involved in ISS research may be interested in performing R&D in a
lunar-based laboratory. In the long term, future ESA and the EU may even consider
setting up programmes similar to NASAs Lunar Catalyst or COTS programme for
offering commercial space transportation services or even programmes for
supporting SME R&D payloads to be flown to the Moon village. If European
companies enter into partnership with American ones, ESA and the EU may set
up spin-in programmes to support these companies in transferring knowledge in
Europe from NASAs NextStep programme on building and operating inflatable
habitats for future Moon missions. However, the Moon village is a concept that
could become the basis for international cooperation between space agencies and
industry through the creation of future public-private partnerships that will be
responsible for the operations and its commercial utilization.
Yet, the creation of an international Moon village may result in increased
competition between commercial space transportation service providers and tradi-
tional launch service providers.
62 4 Interplanetary Settlement and In Situ Exploration
The NASA Lunar Catalyst programme, referred to as NASA Lunar Cargo Trans-
portation and Landing by Soft Touchdown (Lunar CATALYST), is a new
programme using the SAA (see Chap. 1) to encourage11 the development of robotic
lunar landers by private companies (Fig. 4.8).
The idea is to encourage NewSpace companies to develop commercial lunar
transportation capabilities that could be integrated in the future with US commer-
cial launch capabilities to deliver payloads to the lunar surface. It is assumed that in
the long run there could be an increased demand for performing R&D and lunar in
situ resource extraction which will put up the demand for robotic lunar lander
competencies.
Future commercial missions could include communication nodes and infrastruc-
ture, power and mobility infrastructure, cargo transport services, entertainment and
education (Young 2015).
Space agencies like ESA may even test new techniques like 3D printing for
construction of lunar modules, while others, like NASA, may encourage companies
like Bigelow to construct and test inflatable lunar modules. Or certain space
agencies, like the Russian one, may revive their lunar programme and cooperate
with ESA under similar barter agreements as for the ISS construction and
operations.
The future trend will be that space agencies set up programmes to encourage
private companies to develop commercial transportation services, robotic, in situ
resource competencies, 3D printing capabilities in microgravity environment and
in-orbit satellite service capabilities.
Fig. 4.8 NASA Lunar Catalyst concepts, credits: Astrobotic Technology, Inc., NASA/Masten
Space Systems, Inc, Moon Express, Inc.
11
The programme will operate in a similar way as the NASA COTS programme.
4.6 Targeted Markets 63
NASAs NextStep Programme was set up to call for proposals from industry to
partner with NASA for the development of critical technologies needed for human
spaceflights for deep space human exploration. The idea is that through this
programme NASA should partner with private companies involved in technology
innovation that could deliver mission capabilities at lower costs both for com-
mercial low Earth orbit (LEO) advancements and long-duration deep space habi-
tation needs (NASA, Next Space Technologies for Exploration Partnerships-2
(NextSTEP-2) BAA Synopsis 2016d).
In the context of the development of habitation capabilities, NASA will seek to
attract companies that could propose studies that support mission architecture
definition, demonstration of key capabilities and others as discussed below:
Long-duration exploration systems testing
Automation, tele-operations and robotics
Human-assisted sample return
In situ resource utilization (ISRU) demonstration missions
Human research in deep space
Logistics support
General science
Deep space long-duration (e.g. Mars) spacecraft assembly, refurbishment and
validation
The idea is to design these surroundings in such a way that they could survive
deep space environment, e.g. higher radiation, and be used for future Moon and
Mars missions. In a way this programme offers an opportunity for NewSpace
companies to develop technology solutions for deep space habitation modules.
The capabilities developed under this programme by NewSpace companies could
also be used under the Moon village concept and spun in in Europe.
The space economy is expected to become a multitrillion dollar industry in the next
20 years as discussed by Goldman Sachs consulting company. They believe that
companies involved in space mining and tourism will draw a number of investors.
However, one should not forget that the space mining industry is in its infancy in
2017. The description of the targeted markets for future Mars, Lunar and space
resource exploration could be quite challenging since most of the concepts are at a
feasibility study stage .The targeted customers and markets were still unknown in
2016. According to authors like John Lewis (Lewis 2009), the following resources
for future exploration will be most attractive: lunar resources could be used for
oxygen for propellants and local life support, ferrous metals for local construction,
64 4 Interplanetary Settlement and In Situ Exploration
refractories (especially rutile) for heat shields and aerobrakes and Helium-3 for
fusion fuel on Earth.
Moon, Mars and near-Earth asteroids contain space resources of interest for in
situ resources exploitation.
Authors like Jerry Sanders (2016) also identify resources of main interest like
oxygen, water, hydrogen, carbon/CO2, nitrogen, metals and silicon. The following
major resources of potential interest have been identified on the Moon:
Regolith, oxides and metals (Ilmenite (15%), pyroxene (50%), olivine (15%)
and anorthite (20%))
Solar wind volatiles in regolith (hydrogen 50150 ppm, helium 350 ppm and
carbon 100150 ppm)
Water/ice and other volatiles in polar-shadowed craters (110% (LCROSS),
thick ice (SAR))
On Mars there are carbon dioxide, oxides and metals in the soil. Lunar regolith
could be potentially used for the construction of human habitats or landing pads,
roads or shelters against thermal radiation and micrometeorites (NASA, 3D Print-
ing in Space 2014a) on the Moon.
For ESA Moon village, the idea is to use 3D printing using lunar regolith for
building the habitat for the astronauts. NewSpace companies like Planetary
Resources have also looked at 3D printing using an asteroid composed of iron,
nickel and cobalt.
The use of 3D printing on the lunar surface at present seems an attractive
opportunity for NewSpace companies. However, there are a number of political,
technical12 and financing risks that need to be overcome before 3D printing
becomes a reality on the Moon.
12
3D printing may be difficult on the Moon gravity.
13
Data from LRO, LCROSS and Chandrayaan probes have demonstrated the availability of huge
deposits of ice in the cold trap craters of the lunar poles.
4.6 Targeted Markets 65
According to SEC, the targeted markets between 2018 and 2042 will be the
following:
Early marketsGEO telecom satellites providing hypergolic propellant for the
life extension of satellites. The target is to service some of the 400 satcom
satellites.
Civil spacethe 14 governments from the International Space Exploration
Coordination Group (ISECG) and space agencies (e.g. US, Russia, China,
India, Pakistan, South Korea, Japan) may aim at purchasing long-term propellant
contracts.
The company will be aiming at developing modular, flexible, highly reliable
transporters that will provide the next generation of so-called in-space taxi services.
Their most optimistic scenario according to their customer demand model aims at
supplying approximately 50,000 metric tons of propellant by 2042 (Company
2013). Innovative concepts like this one will need to have an attractive business
model that will make possible the development of a large market initially targeting
governments as prime customers.
14
A zero-G printer was launched into orbit in 2014 and was a result of a joined partnership between
NASA MSFC and the company Made in Space (Space 2015).
66 4 Interplanetary Settlement and In Situ Exploration
Will it be more cost-effective to make 3D printed tools on the ISS rather than
launch them to the ISS?
Private SME could be interested in participating in future lunar space missions,
in particular projects like ESA 3D lunar base, using lunar oil for constructing a
lunar settlement.
Planetary Resources are targeting four markets: fuel from water, extraction of
platinum, 3D printing from an asteroid (or meteorite) and Earth observation. The
company aims at producing fuel in space from carbonaceous chondrites rich in
water that can be broken down into highly efficient LOX/H2 rocket fuel (Resources
P. 2016a). The approach they will undertake will depend upon the composition of
the targeted asteroid. They claim that the mining equipment required will be quite
simple; it is even possible that no surface contact with the asteroid may be needed.
According to their concept, first they want to enclose a small asteroid or position a
cold plate in the vicinity of a large asteroid, and then they aim at concentrating
thermal solar energy onto the asteroid to reach a certain temperature, at which water
will volatilize and the gaseous water will freeze on contact with the cold place in a
pre-concentrated form. Once the desired quantities are captured, the place will
release the asteroid and deliver the water in LEO (Fig. 4.10).
The extracted water will be broken into hydrogen and oxygen rocket fuels. The
fuel will be stored in refuelling stations and will be used for refuelling GEO
telecommunications satellites. The availability of fuel will enable the growth of
space mining operations.
The second targeted market is linked to extracting platinum, since it is believed
that the platinum group metals (PGMs) are abundantly available on asteroids. The
access to platinum will encourage the production of technologies (e.g. catalytic
converters), aiming at reducing emissions and resulting in innovations in the
automotive sector and other sectors (Resources P. 2016a).
The company has been quite successful in signing an agreement for 25 million
euros with the Luxembourg government and the Societe Nationale de Credit et
dInvestissement (SNCI) for launching the first commercial asteroid prospecting
mission by 2020 (Resources P., Planetary Resources 2016b). In addition to the
above targeted market, the company is developing innovations in using 3D printing
technologies (Metals 2016) from asteroid metals to print a spacecraft prototype,
thus seeking to develop the market for 3D printing in the zero-gravity environment
of space. The company will concentrate on their asteroid mining activities in the
frame of their activities of asteroid mining in Luxembourg.
Deep Space Industries15 is the other company concerned with asteroid and near-
Earth object mining. They are interested in extracting water and important elements
like organic carbon, sulfur, nitrogen and phosphorous and ferrous metals (indus-
tries). The company has a similar goal to retrieve and process space resources into
commercially useful products, aiming initially at near-Earth asteroids and
processing them into propellants for refuelling communication satellites and metals
for building infrastructures.
Their initial plan is first to launch the Prospector-X probe that will look for NEA
that will contain water, metals and silicates. This probe will be built within the
framework of the Luxembourg R&D space programme discussed in section In Situ
and Planetary Resource Exploitation.
The companies involved in promoting asteroid mining will need to focus on
developing viable business cases and to define the direct and indirect benefits from
mining asteroids. Similar to the terrestrial mining industry, the asteroid mining
industry will operate in severe environments and will be exposed to high mainte-
nance, operations and integration of infrastructure costs. In addition, this emerging
industry will also need to focus on having a return on investment and justify the
investment for building the infrastructure (Sanders 2016). The terrestrial mining
industrys annual growth rate of 8.5% (NASA 2014a, b) may seem attractive to
NewSpace companies and may build their business case around it. However, it may
be quite misleading as investors will raise questions related to whether these
companies will be able to attract private infrastructure financing and generate
sufficient profit to achieve return of investment and whether they can create
sustainable business models that will support them in their activities. How far
would the price of rare metals drop if the market is flooded with cheap material
from asteroids? Would the resulting price be sufficient to keep the business going?
How long would it take to earn back investments in a lunar or asteroid mine?
Nevertheless, the NewSpace companies interested in situ resource exploitation
should at first be in a position to identify the resources on the asteroids and then be
able to attract long-term financing for implementing their missions that will permit
the collection and extraction of these resources. These companies will also face
questions related to their capacity to build infrastructures that will operate in
extreme environment and be able to achieve long-duration and autonomous oper-
ations without any astronauts support. Clearly the Luxembourg initiative will
encourage the further emergence of new markets and the evolution of the concepts
for lunar and asteroid mining. The NewSpace companies involved in these
15
The company became famous for its Kick starting campaign of selfies into space using their
Arkyd telescopes, as part of their Ceres programme for the launch of ten Earth observation
microsatellites with the objective to provide EO services in agriculture, fire and pollution moni-
toring. Sadly due to low interest from the business community, the Arkyd Kick starting campaign
was cancelled, and the company will return the funding to the public.
4.7 Mars Exploration 69
Mars exploration has always captured the dreams and imagination of visionaries
and recently of the public. Earlier concepts for exploration of Mars were discussed
by Mars Society proposal for a so-called Mars Mission Trans-Orbital Railroad plan,
using SpaceX Falcon 9 launch vehicle and Dragon capsule for crew transportation.
Buzz Aldrin also proposes a human Mars exploration starting first with the explo-
ration of the two Martian moons: Phobos and Deimos. The aim is to overcome
communication delays, to create conditions for operating equipment on Mars and
use these opportunities to pre-position habitats without need of on-site astronauts
(Aldrin 2013).
Nevertheless, the concept for Mars exploration that truly captures the imagina-
tion is the Mars One initiative. It is a fully private initiative with the primary goal to
establish a human settlement on Mars. The idea is to select a crew of around
40 astronauts from the public and bring four of them to Mars on the first mission.
The crew selection, training, preparation, launch and trip will be filmed in real time
and broadcasted all over the world. The founders of the Mars One initiative decided
to bravely go for a one-way mission for two reasons: first, it is to support the
mission objective of creating a Mars settlement (MarsOne, MarsOne Mission: Is it
really Possible? 2012), and second, the current complexity and cost for the return
make its cost prohibitive in the current technology landscape.
Zubrins concept uses existing launch technology and the Martian atmosphere to
generate rocket fuel, extracting water from the Martian soil, and eventually utilizing
the abundant mineral supplies of Mars for construction purposes (Aldrin 2013).
According to his concept, the markets of commercial space transportation will
grow drastically due to the need to launch around 30 tons of cargo on Mars which
will lead to increased demand for crew and cargo launch services and orbital
transfer vehicles. In addition, a bigger demand for inflatable habitats like the
Bigelow BEAM module may be expected. Furthermore, a long-term Mars mission
whose one-way trip will last at least 500 days will benefit from in-orbit satellite
servicing and 3D printing in microgravity environment of spare parts. At this early
level of concept maturity, it is difficult to predict the types of new commercial
markets that will emerge.
It is clear, though, that a future Mars mission will face an increased demand for
space transportation services, robotics, in-orbit satellites servicing and 3D
70 4 Interplanetary Settlement and In Situ Exploration
The Mars One initiative comprises the launch of a demo mission in 2022 seeking to
prove whether the concept for certain technologies works, the launch of a rover and
communication satellite in 2026, the launch of six cargos containing two living
modules and life support systems in 2029 and the launch of the first crew to Mars in
2031 (MarsOne, MarsOne Mission: Is it really Possible? 2012) (Fig. 4.11).
Mars One targets the edutainment and entertainment market since their business
model is different from the traditional space companies. Mars One will be looking
at several ways to generate revenues and tap into new markets, described below
(MarsOne, MarsOne Mission: Is it really Possible? 2012):
Global streaming media campaign
Astronaut selection programme
Ongoing streamed astronaut training programme
Crowd-sourced fundraising
Lease of Mars One research facilities
R&D markets through the sale of IPR associated with R&D research in the fields
of medicine, pharmacology, low-G biology, bio-engineering and solar systems
studies
The primary revenue will be from edutainment and the streaming media cam-
paign; however, the potential of R&D markets and the potential for leasing research
facilities should not be underestimated. Initiatives like Mars One possess the power
to capture the imagination, develop new markets and push the boundaries of space
exploration.
Fig. 4.11 Mars One first crew to Mars by 2031 (MarsOne 2016a, b)
4.9 Conclusions 71
Future Mars missions will increase the demand for commercial space trans-
portation services, new capabilities in robotics, tele-operations, artificial intelli-
gence, automation, ISRU capabilities and 3D printing. These will provide long-
term new market opportunities for NewSpace companies if they succeed in devel-
oping these capabilities.
4.8 Challenges
In addition to the major technical, financial and market risks, the NewSpace
companies involved in these activities will primarily aim at offering fuel for
refuelling GEO satellites and also extracting platinum. They may be exposed to
numerous challenges before they are able to develop their targeted markets.
Technical challengesdifficulties to locate the best deposits of ice and consid-
erable investments for identifying them (Rapp 2006), crew autonomy beyond
LEO, high reliability of life support systems, space radiation protection, auton-
omous vehicle system management (Hufenbach 2016), lack of in-orbit satellite
competencies and services for rendezvousing and refuelling satellites.
Funding capitalcompanies may fail to attract sufficient crowd funding for
realizing their ISRU concept; private investors may shy away from these con-
cepts as they may consider them to be expensive long-term infrastructure
projects.
Market developmentNewSpace companies may wrongly assume that there is
a huge market, that its creation is easy, since the time-to-market may be
too long.
Long-term cost overruns for safety operations may be expected for such com-
plex missions.
NewSpace companies will encounter some additional challenges connected with
lunar and asteroid mining, such as the following: difficulties to attract funding and
quickly generate return on investment; to develop viable and sustainable business
models for ISRU, lunar and asteroid mining; and to identify unknown markets and
customers. Certain companies might encounter terrestrial competition from
ground-based industries and exposure to high maintenance and operating costs
for asteroid mining. The establishment of the infrastructure and growth of produc-
tion resources will require patience and long-term investment.
4.9 Conclusions
NewSpace companies will have to both create new markets and take into account
the competition from terrestrial technologies. The terrestrial mining industrys
annual growth rate of 8.5% (NASA 2014a, b) seems attractive to NewSpace
72 4 Interplanetary Settlement and In Situ Exploration
companies, but will they be able to attract private infrastructure financing and
generate sufficient profit to achieve return of investment? Will they be able to
have sustainable business models that will support them in their activities? How
much would the price of rare metals drop if the market is flooded with cheap
material from asteroids? Would the resulting price be sufficient to keep the business
going?
Private initiatives for future Mars exploration like the Mars One mission, which
captured the imagination of the public, are changing the business model in the space
industry. They are tapping into the entertainment markets through live global
streaming of astronaut training and launch. In addition, they are also looking
at the development of the R&D markets in the fields of medicines,
bio-engineering, etc.
With future Mars missions, the markets of commercial space transportation will
grow drastically thereby increasing demand for inflatable habitats like the Bigelow
BEAM module. Long-term, one-way Mars missions lasting for at least 500 days
will benefit from in-orbit satellite servicing and 3D printing in microgravity envi-
ronment of spare parts. At this early level of maturity of the concept, it is difficult to
predict the types of new commercial markets that will emerge. The demand for
commercial space transportation services, new capabilities in robotics, tele-
operations, artificial intelligence, automation, ISRU capabilities and 3D printing
is expected to increase. This, in turn, will step up competition between NewSpace
and traditional launch services and generate economies of scale.
The promise of lunar and asteroid mining is expected to result in the extraction
of water, hydrocarbons and structural metals. The lunar water could potentially be
used for liquid oxygen and liquid hydrogen for propellants. Asteroid mining is
expected to result in the extraction of water, hydrocarbons and structural metals. If
we can coherently and convincingly define that vision, then the arguments for going
beyond GEO will start falling into place and the need for ISRU to enable that
commercially and cost-effectively will become compelling.
ESA may even create a programme to spin-in in EU technology developments
for constructing human space habitat and other capabilities developed under NASA
NextStep programme or other national space agencies programmes.
Space agencies may set up programmes to encourage private companies to
develop these competencies which will result in the creation of new commercial
space markets, new services and products.
The companies to become involved in these concepts will face a complex
environment. Yet, through potential public-private partnerships with governments
and space agencies, they could successfully implement these concepts. The evolu-
tion of 3D printing under microgravity conditions and the development of in-orbit
satellite servicing capabilities resulting in refuelling satellites are bound to bring
potentially environmental benefits to space debris mitigation.
Chapter 5
Commercial Space Station Activities
5.1 Introduction
At present five space agencies, NASA, Roscosmos, ESA, JAXA and CSA (e.g. ISS
partners), are operating the International Space Station in low Earth orbit (LEO).
They own and operate their own modules and share some of the on-board exper-
imental racks. The space station is the result of 25 years of international cooperation
between the agencies. The station is a space laboratory that could host up to six
astronauts, and its size corresponds to around two football playgrounds. The space
agencies have planned the operational life of the ISS to last until 2024; however,
there are discussions for prolonging it by 2028. Presently the ISS partners do not
have long-term plans for building a next generation of space stations although there
are various ideas. One of them is that after the launch of the Russian multipurpose
module in 2019, the Russian ISS segment will be fully independent from the rest of
the ISS in terms of power, communications and other resources. Permitting the
separation of the Russian ISS modules, a Russian space station may be created
which will even be fitted with inflatable modules (Zak 2016). In addition China has
been looking at launching its own Chinese large modular space station in LEO
around 2022. Researchers worldwide are invited to fly their experiments on board
it.
NASA called for private companies to offer transportation services thus intro-
ducing competition to encourage the development of crew and cargo transportation
services for LEO and beyond. By creating this commercial opportunity, the agency
undertook a risk, since the companies bidding for NASA COTS contracts might fail
to attract sufficient private funding1 to undertake the necessary technology
1
In the early days of NASA COTS programme, the agency had signed an agreement also with
Rocketplane Kistler, allocating USD207 million. The company failed to attract private funding,
and NASA cancelled their agreement with them, following the signing of an agreement with
Orbital for USD178 million.
developments. The companies bidding might also face high technical risks in the
development of the launched vehicles, as they started developing them from
scratch. On the other hand, it offered unique commercial opportunities to compa-
nies to develop and test their new technologies and systems on board the ISS
resulting not only in suppliers competing for offering cargo transportation services
to NASA2 but also in developing innovative concepts for ISS utilization (Fig. 5.1).
An example is the docking of the Bigelow BEAM inflatable module attached to
the ISS in 2016 which creates the basis for developing the Bigelow next generation
space station consisting of two B330 expandable modules. Other companies like
Axiom are investigating the possibility to dock a commercial module to the ISS in
2020 and, after the end of the ISS in 2024, form the Axiom commercial space
station. The plan is to attach the inflatable Xbase module to it and create a fully
commercial space station (Fig. 5.2).
With the expected retirement of the ISS either in 2024, the role of space agencies
in building and operating space stations will shrink, but the research community
will still need to fly their experiments in microgravity. Therefore, new business
opportunities for flying and hosting microgravity R&D experiments will be created,
as there will be no permanent governmental space laboratory open for commercial
2
SpaceX Dragon vehicle was successfully launched on a Falcon 9 and already several times
docked to the ISS. Orbital ATK Cygnus vehicle was also successfully docked to the ISS and could
be launched on an Antares or Atlas 5 launcher. The CST-100 vehicle Boeing is planned to be
launched on an Atlas 5, while Sierra Nevadas Dream Chaser resembles a small space shuttle with
reusable capabilities and is planned to be launched on an Atlas 5 and Ariane 5 launchers. Lockheed
Martin Jupiter and Exoliner could also be launched on an Atlas 5.
5.2 Stakeholders 75
Fig. 5.2 The US commercial crew and cargo capabilities (Lynne 2015). Credits: NASA
payloads after 2028. By 2024 the ISS markets3 will have probably reached the
mature stage of market development, with high profits, stable demand and compet-
itors. As discussed in Chap. 1, governmental and private customers will have a high
demand for microgravity platforms hosting R&D experiments.
5.2 Stakeholders
In the early days of ISS commercialization, the prime actors in ISS utilization were
space agencies and traditional space companies. They used to cooperate with
non-space companies for helping them qualify and integrate their payloads on
board the ISS. In their nascent stage, the ISS markets had only few companies for
customers. Nevertheless, in the last 15 years the ISS markets have entered into a
frenzied phase of development, and the number of customers have doubled
(Fig. 5.3).
The difference between the early days of commercialization in the late 1990s
(see Chap. 3) and at the present is that space agencies are the customers of
3
In 2016 the ISS markets reached the frenzied stage of market development with market expan-
sions, raise of profits and increased competition.
76 5 Commercial Space Station Activities
Information for the rest of the ISS partners research institutes involved in ISS
utilization is limited.
In spite of the fact that the Russians were pioneers in space station commercial-
ization (as already discussed in Chap. 3), they decided to focus on attracting
institutional rather than commercial customers. At present, Roscosmos is still the
only space agency flying astronauts and cosmonauts to the ISS and offering launch
services to the rest of the ISS partners.
In the late 1990s, CSA had the intention to attract commercial users for their ISS
mid-deck lockers and even contracted a big consulting company to develop a net
present value model for their activities. However, their commercialization activities
78 5 Commercial Space Station Activities
ceased as there was little interest from the Canadian companies in ISS commercial
utilization. JAXA initiated its ISS commercialization activities much later, in
2004,4 and used a so-called paid utilization system for the KIBO module for
research and cultural related projects.5 With the retirement of the ISS, the R&D
companies involved in microgravity research may look at flying their payloads on
board commercial space stations or the Russian or Chinese space stations. The
question that arises is whether US/European companies will be ready to fly their
payloads on board a Chinese space station.
The lessons learnt by the ISS partners from space stations commercialization as
discussed in Chap. 3, are relevant for the future activities of NewSpace companies
and for space agencies interested in encouraging ISS commercial utilization.
NewSpace companies will have to create new markets and parallel with it, pay
heed to competition from terrestrial technologies. From the analysis of the lesson
learnt, NewSpace companies involved in flying microgravity experiments will have
to clearly define their unique selling points, diversify their customer base and
develop clear business cases. In spite of high expectations for success, the ISS
partners ran into many obstacles in developing ISS commercialization, as presented
in Table 5.2, Lessons learnt from ISS commercialization. Space agencies consid-
ered commercialization as a way to achieve partial cost recovery and increase
public awareness of the existing market opportunities. Today the concept is differ-
ent; ISS commercial utilization is seen as a way to encourage the creation of new
industries.
The former approach to commercialization was normal for the ISS partners as
they used to be public bodies which had no business or commercial experience, and
therefore, the prime benefits they foresaw from commercialization were connected
with cost recovery (Tkatchova 2013).
The above lessons have been drawn from the MIR and ISS commercialization
for the period of up to 2008. In the past few years, the ISS partners generated more
lessons from the research performed on board the ISS.
NewSpace companies may have too high market expectations and assume that
market creation is easy. However, as in the case of protein crystallization, their
experiments when flown in microgravity may be exposed to competition from
terrestrial technologies. In addition they will face difficulties in classifying their
4
JAXA set up an Open Space Lab to create new business models and projects (Tkatchova, JAXA
ISS Commercialisation strategy 2011). JAXA also launched the JAXA Cosmode Project that
provides a brand for space-related products and services.
5
Under the JAXA utilization system a number of projects were launched, such as the Olympus
Camera mission, Lotte Xylitol, Poetry competition, flying flower seeds in space and others.
5.3 Lessons Learnt from Space Station Commercialization 79
Table 5.2 Lessons learnt from ISS commercialization (Tkatchova, Space Station Lessons learned
2011)
Market creation is easy Space-based research versus terrestrial research
(e.g. in the mid-1990s protein growth in micro-
gravity was considered to contribute to the best
protein crystal structure; however, for several
years now, similar protein crystals have been
grown in terrestrial laboratories)
Competition from terrestrial technologies Protein growth in the microgravity environment
and solution was a promising area of research; microgravity
environment creates the right conditions for
crystals growth. However, ground-based labora-
tories have managed to grow crystals with simi-
lar quality
Different pricing policies ISS partners set up different prices for the ISS
services they were offering to customers
Top-down market analysis, rather than a Cost estimates of today are doubled during mis-
bottom-up market analysis (Tkatchova sions, and cost overruns can be expected for
2013) future interplanetary space missions
Long time to market period of a commer- Unknown R&D customers and markets, com-
cial project bined with a lack of historical reliable market
data, marketing and sales strategy
Space missions take at least 10 years to Therefore, time to market of a product is rather
succeed long
markets, identifying their customer and pricing their services, as already discussed
in Chap. 2.
For the ISS partners, the value of the R&D research performed on board the ISS
is of critical importance for the research in the areas of osteoporosis, muscle and
bone physiology, neuroscience, new materials and processes and biotechnology.
The lessons learnt from the ISS partners were summarized in by the Multilateral
Coordination Board (MCB) in 2009 (Table 5.3).
Space agencies faced political, budgetary and strategic challenges, such as
budgetary reductions, political pressures to achieve cost recovery and fear from
the STEM community that commercial payloads will overtake their flight oppor-
tunities. Clearly after the end of the ISS, the space agencies role will evolve.
The markets, targeted by NewSpace R&D, will contribute to attracting private
investors to cofinance commercial payloads. Therefore, NewSpace companies will
need to get involved in the early phases of the early design of space station
programmes in order to be in a position to influence requirements and have access
to multidisciplinary racks and lockers that will meet their needs. Some of the
questions that arise are whether R&D customers will be willing to fly their payloads
on board a Russian or Chinese space stations or will they prefer to fly them on board
commercial space stations?
The questions space agencies will encounter are the following: How can the
remaining time on the ISS be utilized in the best way in order to enable the demand
80 5 Commercial Space Station Activities
Table 5.3 Lessons learnt from the ISS programme (MCB 2009)
Utilization Recommendations
Difficulties from user communities to identify Utilization should be developed as part of the
benefits from ISS utilization long-term mission strategy for the programme,
with clear technical, policy and communica-
tions goals
ISS science and applications Exploration programmes should use the ISS to
pursue science and applications relevant to the
future of the space programme
Consult with end-users early in the Engage end-users early to ensure programme
programme to ensure useful ISS utilization design will have the needs of all parties
End-users should coordinate internationally International coordination groups will bring
benefits with respects to ISS utilization
Commercial involvement
Considering commercial engagements early It is important to offer and ensure opportunity
in the process depending on their programme for business involvement at an early stage of the
ISS programme
Establish framework and await clear markets A common approach between ISS partners
for commercial engagement should be set up
In the last couple of years there has been strong investor interest in the USA. In
2015 more than 50 venture capital firms invested in space deals worth of capital of
around $1.8 billion (Group, Start-up Space 2016). Recent studies have indicated an
interest of around 250 investors in start-up companies, 66% of whom are from the
USA and the rest, 34%, from outside the USA. The investor interest in NewSpace
companies demonstrates trust in the business cases, in the stable and increasing
demand for commercial crew/cargo transportation systems, earth observation appli-
cations, broadband satellite communications constellations, payload integration
5.4 Targeted Markets 81
services and other type of services. In recent years commercial projects related to
research on board the ISS have demonstrated that ISS markets have entered a
frenzied stage of development with increasing profits and markets and relaxed
regulation.
For 15 years the ISS partners have been investigating ways to attract non-space
companies to perform research on board the ISS. The diversity of the research
performed on board the ISS offers opportunities to non-space companies to perform
research in the areas of biotechnology, biology, new drug development, osteopo-
rosis, cell and tissue engineering, new materials developments, robotics and tech-
nology testing and demonstration. For the last 10 years, many studies have been
assessing the market demand for flying R&D experiments and space tourists to the
ISS. Some of these studies have analysed historical trends to make predictions for
the future demand for flying experiments to the ISS. For example, NASA issued a
study in which they propose two scenarios, one for the lower end and the second
for the upper end, the lower end being based on historical trends, while the upper
end reflecting expected growth (NASA, Commercial Market Assessment for Crew
and Cargo Systems 2011). The national interests market reflects other countries
national interest to fly their own astronauts or payloads to the ISS. Others presented
market demands including information about education markets. In this study
clearly NASA didnt consider the demand of the rest of the ISS partners when
calculating the historical estimate under applied R&D. The national interests
category presents countries that lack crew and cargo transportation programmes
and are willing to fly their own astronauts and experiments. The space tourism
category includes spaceflight participants who fly in space for their own pleasure.
Applied R&D includes customers interested in flying their experiments on board
the ISS, and other markets include subcategories, such as satellite servicing, media
and entertainment and education markets (Table 5.4).
From Table 5.5 it becomes clear that the market with the highest demand of
36 astronauts, even for the pessimistic scenario of human spaceflight services, is the
national interests market. With the retirement of the ISS in 2024, there will be a
new market opportunity, and NewSpace companies investing in the design and
development of commercial space stations will look into attracting customers from
these countries and offering in addition full astronaut programmes.
Table 5.4 Crew and cargo transportation demand estimates per market segment (NASA, Com-
mercial Market Assessment for Crew and Crago Systems 2011)
Cargo lower end Cargo upper end Crew lower Crew upper
Market segment (lbs)a (lbs) end end
National interests 6180 24,72028,340 36 186216
Tourism 990 17,700 8 143
R&D and technology 0 950013,400
development
Other enabled markets
Total 7170 51,92059,530 44 329359
1 lbs 0.45359237 kg
a
82 5 Commercial Space Station Activities
Table 5.5 ISS R&D and emerging markets (Tkatchova, Emerging markets and space applications
2011a)
R&D industry sector Industrial applications Market size
Health industry
Drug development New drug development, micro- In 2050, the total direct costs
Osteoporosis encapsulation from osteoporosis is expected to
Medical scanning Bone microstructure measure- reach 76.7 billion Euros in the
equipment ment EU (I.O.F 2005)
Sports equipment Preventive drugs/therapies, carti- DNA studies
Cancer research lage degeneration Development of preventive can-
Physiological studies Hip, spine, ultrasound diagnostics cer drugs and therapies for
equipment human spaceflight mission will
Radiation impacts on human need to be addressed for future
health for nuclear energy lunar, asteroid and Mars
Preventive drugs and therapies missions
Cell and tissue engi- Bioreactor development ESA ERISTO projecta
neering In vivo diagnostics Freqbone experiment on board
Bone formation Effects of drugs on bone cell the ISS
activity
Lighter and stronger Lightweight materials Aviation industry
materials for aviation Novel casting alloys Automotive industry
and automotive Bio-materials 3D printing in microgravity
industries High-temperature ceramics
Self-healing materials
Nano-materials
Waste management Water purification methods ISS water recycling (astronauts
Closed life cycle ESA Melissa project drinking recycled water)
systems
Software development Requirements integration, opera- Software solutions for SCADA
tions and procedures manage- systems management
ment for TM/TC data
management
Oil recovery Experiments for oil recovery Measuring thermo-diffusion
processes and the Soret effect
SCCO of crude oil
Tele-medicine Neurosurgery ISS METRON project for tele-
Mining industry Robotics for mining robotics operations
Nuclear industry Collision detection MDA is working on spinning off
Security industry Maritime applications its robotics experience for
Aviation applications developing a robotic tool for
neurosurgery (MDA 2009)
ADS-B applications for tracking
aircraft
Space debris Space debris experiments on
board the ISS
Food industry Food processing, preservation ESA Mediet experiment
and nutrition
(continued)
5.4 Targeted Markets 83
Drug development
Cell and tissue Osteoporosis
engineering Drug development
R&D markets Bone measurement
R&T
Equipment
Biotechnology Osteoporosis Preventive therapies
Medical equipment
Health Sports equipment
Nutrition Medical equipment
Environment Hip, spine, ultrasound,
Earth observation In-vivo diagnostics
New materials and protection
Food preservation
Emerging markets Lighter and stronger processing
materials
Education Space games
Media PC games Mobile
Advertising Movies, images Board games
TV shows Space games
Space tourism
Entertainment Astronaut training
Space tourism
Space Exploration Flight tourism Flight tourism
Parabolic flights
Space cosmetics Testing Advertising MIG flights
Pilot training
Publications
Fig. 5.4 ISS targeted markets (Tkatchova, Future Trends in Space Commercialization 2013)
For the R&D markets, non-space customers will have different value chains in
their industries. Furthermore, as already discussed in Chap. 2, non-space companies
will have difficulties to understand the benefits of microgravity research.
Primary market segments could be grouped into R&D markets and emerging
markets, as presented in Fig. 5.4.
The new markets that have started to develop in addition to commercial crew
and cargo transportation markets are in-orbit satellite servicing, 3D printing on
board the ISS, space weather and debris services prevention. The 3D printing
experiment Zero-G means that astronauts could fix and upgrade experiments on
board the space stations, one of the first tools printed on board the station being a
ratchet wrench. Certain materials for 3D printing could be launched to the ISS while
others could be recycled.
84 5 Commercial Space Station Activities
New drug development for treating osteoporosis is a success story, e.g. the Prolia
drug for treating osteoporosis which can be used by women at risk of bone fractures
or the encapsulation experiment on board the ISS that led to the development of a
new cancer preventive treatment (Smith 2013).
The R&D markets of health, biotechnology and food could be interrelated, for
example, the markets in biotechnology. The microgravity environment provides
new opportunities for scientific research in biomedical engineering, tissue engi-
neering, osteoporosis, biomedicine, cell growth, cartilage degeneration and
microencapsulation.
The lack of gravitational forces supports the process of 3D printing and in
addition offers the unique opportunity to print tools or parts that are needed for
performing research on board the space station. Companies like Made in Space
offers the full portfolio of 3D printers. For example, the additive manufacturing
facility will print with a wide range of polymers and is designed to last the entire
lifetime of the space station. In addition they also offer the possibility of a material
recycler. The use of 3D printing on board the space station will offer customers the
opportunity to select hardware they want to be printed on board the station,
avoiding the launch of this hardware to the ISS.
The absence of gravity could speed up the selection of drug candidates for new
drug developments, while companies can test biological models and their technol-
ogy, such as bioreactors. During spaceflight, astronauts experience health problems
such as loss of bone and muscle mass which allows for research in the area of
osteoporosis. Astronauts lose around 1% of bone mass per month, and this bone loss
in microgravity is faster than that of osteoporosis patients on the ground, which
makes possible to observe the processes taking place. Medical solutions could be
found to support ground-based osteoporosis research, for example, in the develop-
ment and testing of bone scanning instruments on astronauts and administering new
drug development for osteoporosis. These medical devices developed for bone
scanning in osteoporosis could, for example, be successfully tested on board of
the ISS.
Other success stories relate to the development of protein crystallization
research that resulted in the creation of a product called Vicetris for treating
hepatitis C.
Companies flying commercial payloads may be interested in broadcasting
images of their instruments working on the ISS. Potential customers can order a
bundle of services from R&D and emerging markets (Tkatchova S., From Space
Exploration to Commercialisation 2006).
Through the exploitation of existing commercial opportunities, companies could
increase their competitive advantages, sales and technology innovation. The suc-
cessful development of these industrial applications (i.e. osteoporosis) could be
beneficial to future space missions. The development of preventive therapies for
osteoporosis for astronauts could be beneficial to long-duration flights in particular.
5.5 Market-Driven Trends 85
Private companies are developing new technologies on board the ISS, with the USA
being in the frontline in attracting private companies to offer commercial technol-
ogies and services. An inflatable space station module (e.g. BEAM module) was
designed, developed and docked to the ISS programme, and new concepts are
investigated for attaching fully commercial modules to the space station as a
basis for future fully commercial space stations. The Dragon lab concept is about
the future transformation of the Dragon spacecraft into a microgravity laboratory
that will carry week-long experiments in LEO.
5.5.1 USA
5.5.1.1 Bigelow
Companies like Bigelow have won contracts with NASA for testing an inflatable
module on the ISS. Their objective with the BEAM module is to demonstrate the
viability of inflatable or expandable habitat technology. The module was docked to
the ISS with Canadarm2 and in May 2016 was successfully inflated, increasing by
an extra 16.0 m3 the living space of astronauts in the future. Astronauts opened the
module and have been monitoring it.
This module is the first inflatable module docked to the space station. The
successful technology demonstration paves the way to future inflatable module
development for commercial space stations and construction of lunar habitats. In
the long term, Bigelow will aim at launching a space station with two inflatable
modules. For example, Bigelow is developing an Expandable Bigelow Advanced
Station Enhancement (XBASE) under a partnership with NASA for the Next Space
Technologies for Exploration Partnerships (Fig. 5.5).
86 5 Commercial Space Station Activities
Once the technology of inflatable modules has sufficiently matured for human
spaceflight, the companies constructing these inflatable modules will have to decide
what types of experiments to integrate in them and how to use these modules
(Fig. 5.6).
The launch of inflatable modules to the ISS will influence the demand for cargo
transportation to the space station. Space agencies using inflatable modules will
have a reduced demand for mass launched to the ISS. This will result in impacting
the launch industry as there will be a reduced demand for heavy launch vehicles.
A change in the paradigm of the launch space industry will be observed.
5.5.1.2 SpaceX
SpaceX was created in 2002 with the objective to develop and provide low-cost
crew and cargo transportation services. The company not only won several NASA
COTS contracts for providing crew and cargo launch services to NASA but was the
first to build a private transfer vehicle and dock it to the ISS. In 2014 it won a NASA
contract of $2.6 billion for flying astronauts to the ISS (Space-X 2015). It was also
the first private company to launch several satellites in space and then return its
rocket first stage back to the launch pad (Space-X 2015), thus challenging the
traditional paradigm of space industry (Fig. 5.7).
SpaceX became successful due to their rapid learning with Falcon 1 and their
approach to quickly improve the design. They had three unsuccessful launches of
Falcon I, and by the fourth launch, the company was almost broke. The company
5.5 Market-Driven Trends 87
Fig. 5.6 BEAM module docked to the ISS (Credits: Bigelow Aerospace)
Fig. 5.7 The SpaceX Dragon commercial cargo craft is grappled by the Canadarm2 (Credits:
NASA)
produces in-house more than 80% which permits them to save sufficient funding
from subcontracting and fully control the production process. The steady stream of
revenues from NASA COTS CRS contracts has allowed the company to get the
Falcon 9 and Dragon capsules in the pipeline stage. The company focuses on the
generation of economies of scale and on attracting a number of customers both from
private and governmental organizations. The reuse and recovery of the first stage is
88 5 Commercial Space Station Activities
still being questioned by other players, and the cost-effectiveness of this concept
still needs to be proven in the long-run.
One of the lessons learnt from SpaceX success is that hardware companies can
be profitable when they are fully in control of the production process and have a
diverse base of governmental and private customers.
5.5.1.3 Axiom
With the expected retirement of ISS, the expected retirement of the ISS companies
like Axiom plans to attach a commercial module to the ISS in 2020. The module
will probably be from Bigelow inflatable Xbase station. The company will detach it
after 2024 and construct a commercial space station, on board of which will be
flown astronauts and R&D experiments. The construction of the commercial space
station will be fully financed by private capital and host commercial and institu-
tional payloads.
5.5.1.4 NanoRacks
NanoRacks was created in 2009 with the objective to provide payload design/
development and integration on board the ISS. Nanoracks aims at rapid delivery
of experiments to the ISS and offers low-cost payload design, development and
integration services to non-space companies. The company realized that the ISS
was underutilized, and there is an opportunity to fly a dozen CubeSat experiments
on board the ISS. By 2016 they deployed 130 CubeSats. On the other hand the
company realized that universities, SME and R&D companies will be able to afford
to pay lower prices for small payloads that could easily be integrated in ISS
mid-deck lockers (MDL).
NanoRacks took the best approach for dealing with NASA and signed an SAA,
in 2009, for the CubeLab platform for cooperating with NASA. The objective of
this SAA was that NanoRacks should utilize the ISS installing its CubeLab platform
for performing educational and low-cost microgravity research. Another interesting
SAA which NanoRacks signed with NASA in 2016 was for the installation of a
commercial airlock in 2019. The commercial airlock is a result of the NanoRacks
and Boeing partnership and will be used for the deployment of CubeSats. Under the
SAA the NanoRacks experiments are completely self-funded, and the company
becomes a customer of NASA. For example, NanoRacks plate reader cost around
USD500,000 and was utilized for biochemistry, stem cell and microbial research.
NanoRacks made a commitment that if the plate reader does not work it will give
back to NASA the money for it. NanoRacks also self-funded a NanoRacks-Protein
Crystal Growth-1 experiment that aims a growing protein crystals in space using a
commercial of the shelf (COTS). Twenty-five (25) CrystalCards are sent to the
5.5 Market-Driven Trends 89
5.5.2 Europe
In 2015 in Europe, ESA launched a call for bottom-up ideas for user-driven
utilization of LEO platforms on the ISS for sustained exploitation for advancing
research, technologies and operations knowledge (ESA, Call for ideas: Space
Exploration as a driver for growth and competitiveness: opportunities for the
private sector 2015). The agencies welcomed innovative partnership ideas for the
following activities:
Improved (e.g. lower cost, shortened time to access, etc.) and sustained post-ISS
access for European users to perform research in LEO
New ideas for ISS utilization in order to maximize its potential to drive innova-
tion, economic development and inspiration to prepare Europes future role in
the international human exploration endeavour
With this call ESA seeks to encourage user-driven exploitation of LEO
infrastructures, future lunar and Mars exploration and joint R&D with the industry.
In the long-term future, there could be partnerships between national space
agencies and industry for exploiting ideas for user-driven exploration in the
context of future microgravity research, space debris and in-orbit satellite services
or future lunar programmes.
One of the major challenges to the NewSpace companies working on developing
commercial space transportation crew and cargo vehicle services for the ISS will be
the retirement of the ISS in 2024 or 2028 at the latest. The companies involved in
the development of commercial cargo transportation vehicles like the Dragon,
Cygnus or the Dream Chaser Cargo vehicles will face bigger challenges in finding
customers for their transfer vehicles after the retirements of the ISS.
5.6 Conclusions
6
In the early days of the NASA COTS programme, the agency signed an agreement also with
Rocketplane Kistler, allocating to USD207 million, the company failed to attract the private
funding, and NASA cancelled their agreement with them, following on signing an agreement
with Orbital for USD178 million.
5.6 Conclusions 91
6.1 Introduction
Space debris is orbital waste from satellites or space stations and is defined as all
nonfunctional, man-made objects, including fragments and elements thereof in
Earth orbit and those re-entering the Earths atmosphere. Man-made space debris
dominates over the natural meteoroid environment, except around millimetre sizes
(ESA, Space Debris 2013b). They consist of everything from the entire spent rocket
stages and defunct satellites to explosion fragments, paint flakes, dust and slag from
solid rocket motors, coolant released, deliberate insertion of small needles and other
small particles (Smith 2007).
Over the last 60 years of space activities, around 7200 satellites have been
launched corresponding to a mass of more than 8 tons currently in orbit. There
are 23,000 human made objects larger than 10 cm in orbit, both dead and opera-
tional, and there are around 750,000 smaller than 1 cm objects orbiting Earth. Of
those objects, 75% are catalogued and are in low Earth orbit (LEO) posing a threat
of collision either with the International Space Station or with operational satellites
(Team E. C. 2016).
Sometimes the speed even of the smallest space debris could reach 50,000 km/h
and could cause catastrophic events. The re-entry of objects from LEO happens due
to natural decay, and although the Earth residual air drag keeps certain areas clean,
debris at high altitudes than 480 km takes a few months to clean up.
One of the most famous cases of space debris was the incident on January
11, 2007, when the Chinese tested their anti-satellite weapon (ASAT) and space
debris destroyed one of their non-operational weather satellites FY-1C. The
destroyed satellite was in polar orbit at an altitude of about 865 km and a mass of
around 750 kg. The Chinese meant to demonstrate their military capabilities to the
world. Instead, this resulted in the creation of more than 2300 pieces of traceable
debris (approximately golf ball size or larger), over 35,000 pieces, the size of 1 cm
Constellation
The problem may grow with the expected growth of future large constellations
of microsatellites and nano-satellites using the Ku- and Ka-band frequencies
(Fig. 6.2).
The expected growth of satellite constellations will result in increased space
debris and complete congestion of (LEO) and geostationary orbits.
The annual risk for aviation due to uncontrolled re-entry has been approximately
quantified as 3 10 4 in 2006 and for air traffic doubled every 15 years (Matteo
Emanuelli 2015). According to the analysis performed by Sgobba during the
Columbia accident, the probability of fragments hitting an airplane was 1/1000
for commercial airliners in the area and 1/100 for general aviation (Sgobba 2013).
The movie Gravity demonstrated very well the threat posed by space debris
and the Kessler Syndrome. The Kessler syndrome is a scenario in which the volume
of space debris is so high that the objects in orbit are frequently struck by space
debris. One of the expected results from this scenario is that space debris becomes a
direct threat to space exploration, potentially transforming LEO into a graveyard
for old satellites. It is possible that within 5 years discussions will be held on
governmental level on how to solve congestion of space debris in LEO, as
congestion in LEO will be much more dangerous and threatening due to its
uncontrolled nature than congestion in airspace. Governments owing satellites
and space stations in orbit may even start consultations with their national space
agencies and national air traffic controller organizations for setting up centres for
space traffic management.
Space debris accidents will raise complex legal questions related to liability and
damages. This additional complexity may even result in higher launch prices due to
the liability of the launching state as stated in the Outer Space Treaty dealing with
these questions.
Countries such as Japan are also active in raising the issues and discussing them
at the international symposium on ensuring stable use in outer space, held in Japan
with major themes related to Space Situational Awareness. Possible solutions for
reducing space debris impacts are dealt in four different ways (Baldesi 2011):
96 6 Space Debris Mitigation
6.2 Stakeholders
NewSpace companies may exploit the emerging space debris market, in which the
prime stakeholders will be space agencies, meteorological, defence agencies,
commercial satellite operators, insurance companies that stand to experience loss
due to space debris damage. The global satellite industry (Group T. T., State of the
Satellite Industry Report 2015) has an expected growth rate of 4%, which
corresponded to a market of USD203 billion in 2014. This market is driven
primarily by commercial satellite operators. Their satellite consumer services
grew by 4% in 2014 and reached up to USD100.9 billion, from which satellite
TV corresponded to a market of USD95 billion, satellite radio of USD4 billion and
broadband services of USD2 billion.
Today in 2016 there are several companies like Tether Applications and the
Japanese Astroscale which consider developing innovative on-orbit solutions for
removing space debris. In the long-term future, parallel with the future constella-
tions, there may emerge a number of companies providing space debris removal
services.
Presently in 2016, space agencies like ESA, JAXA and others are investigating
ways for space debris removal and prevention.
98 6 Space Debris Mitigation
Nevertheless, with the increased growth of space debris, the opportunity for
private companies to develop and offer space debris removal and prevention
services will grow (Fig. 6.4).
National governments, together with ESA and EU, could consider developing
programmes that will encourage further research studies in space debris removal
and prevention. Future H2020 EU calls for projects may invite ideas for in-orbit
satellite servicing and space debris prevention and mitigation.
ESA, national space agencies and national governments can best map the
requirements and understand the challenges in space debris removal and prevention
that need to be considered. Traditional space companies are bound to be actively
involved in these projects, and legal companies may follow suit with the growth of
those activities.
The growing threat of space debris to the aviation industry has become a topic of
strong consideration in the last 15 years. The annual risk for aviation due to
uncontrolled re-entry has been approximately quantified as 3 10 4 in 2006
and for air traffic doubled every 15 years (Matteo Emanuelli 2015). The threat of
6.4 ESA Space Debris Programmes 99
debris to aviation has always existed. For example, in 1996, a Chinese Boeing
757 flying from Beijing to Wuhan had to make an emergency landing after the
exterior glass of the cockpit was cracked by an unidentified object at 9600 m.
In March 27, 2007, a wreckage of the Russian Progress 23 ship was seen by an
Airbus A340 of LAN Airlines, the pilot estimated that the debris was 8 km away
from the aircraft and heard a sonic boom as it passed (Matteo Emanuelli 2015).
Another example goes back to January 2012, when the Russian Phobos-Grunt
made an uncontrolled entry, and the European airspace was closed for 2 h
corresponding to a calculated cost of 20 million euros (Matteo Emanuelli 2015).
To deal with the situation, governments owning satellites and space stations in
orbit may even start consultations with their national space agencies and national
air traffic controller organizations for setting up centres for space traffic
management.
In 2016 FAA in the USA began considering the possibility to inform commer-
cial, civil and foreign satellite operators of possible in-orbit collisions in coopera-
tion with the office of FAA commercial space transportation (Werner 2016). Since
FAAs ambitious goal is quite costly, it will have to work out a financial scheme by
which to fund the provision of this information type of service.
In Europe, it is ESA that deals seriously with the issue of space debris chal-
lenges. For example, ESA has already started working on setting up a Re-entry
Direct Broadcasting Alert System (R-DBAS) for developing a device that will
directly communicate with airplanes regarding dangerous areas due to falling
space debris (Sgobba 2013). ESA has also launched several R&D space debris
programmes, to encourage the creation of new technological solutions and services
for space debris mitigation.
In order to respond to the growing threat of space debris, governments and space
agencies have defined clear requirements for space debris mitigation. In response to
the space debris challenge, ESA has already set up a Clean Space initiative that will
encourage the development of novel technologies and approaches for the removal
of space debris and for the design of non-debris creating missions. It is worth noting
that through this initiative, the agency aims to foster the transformation of the
environmental challenge into business opportunities for the European space
industry.
ESA Clean Space initiative aims at providing an insight into the technological
advancement1 achieved to date in the fields of space debris mitigation (SDM) and
1
Other national space agencies like CNES are researching a so-called orbital debris chaser concept
that is equipped with a 30 to 50 km long tether and is used for capturing space debris.
100 6 Space Debris Mitigation
active debris removal (ADR). In response to the above requirements, the Clean
Space initiative will be built upon three building blocks (ESA, Clean Space 2016a):
EcoDesigndesigning to address environmental impacts
CleanSatdesigning to reduce the production of space debris
eDeorbitremoving a large piece of space debris from orbit, such as the Envisat
satellite
The mission that provides the biggest opportunities for the creation of new
markets and services is the e.Deorbit mission. The e.Deorbit mission will be the
worlds first active debris removal mission that will aim at developing technologies
in the following areas: non-cooperative rendezvous and formation flight, capture
and control of large non-cooperative objects and development of competencies in
adaptive guidance, navigation and control (ESA, E.DEORBIT 2016b). The idea is
that after ESA develops the technology platform and demonstrates its feasibility,
private companies will use this technology platform or a similar one for removing
large old satellites from orbit. It is still unclear what approach will be chosen by
ESA to encourage the creation of new markets and services for space debris
prevention.
One possibility for ESA is to set up programmes under which private companies
could develop solutions to terrestrial problems using space-based technology (tele-
communications, earth observation and navigation systems). Another one is for
ESA to lease the platform for de-orbiting old satellites to private companies. This
scenario could be viable only if the private companies have strong economic
incentives to do it. A third scenario concerns the early phases of the missions
which are involved in the development of this platform, during which market
studies should be initiated about target customers as end-users. Thus, once the
platform is operational they could become the players responsible for its
commercialization.
Other space agencies like JAXA are focused on ideas for using electrodynamics
tethers for space debris removal. JAXA is working on a debris removal vehicle with
multiple EDT systems. The vehicle approaches a debris and installs an EDT system
on it which activates itself in a prescribed sequence and deploys the tether. The orbit
of the debris can be lowered by the EDT thrust until it re-enters atmosphere (JAXA
2013).
Companies like Nitto Seimo Co are looking at learning from the experience of
fishing net companies to develop technologies to clean up space debris. The
Japanese Nitto Seimo Co, a company with a fishing net manufacturing experience,
has already developed a space net, measuring 1 km long and 30 cm wide and made
of metal fibre. The idea is that the launched satellite will unveil the wire net at a
length of 300 m which will generate a magnetic field to move the debris (Daily
2014). This Japanese technology development has been possible due to the
6.6 Targeted Markets and Services 101
agreement signed between JAXA Japanese space agency and the Nitto Seimo Co
company. The idea behind this agreement was to pave the way to the creation of
new services, solutions and markets (e.g. in orbit satellite servicing). Unfortunately
the experiment didnt work. Nevertheless the creation of new markets for space
debris removal will results in increased competition between companies developing
space debris removal concepts and technologies in the far future.
Space agencies should be the first to create programmes and set up the technology
demonstration platforms for space debris avoidance, protection, removal and pre-
vention. As mentioned earlier, it is early to predict which domains will grow and
develop best, yet, there are already a number of companies initiating various
projects for removal of space debris and exploiting those market opportunities.
Certain companies study the opportunities for launching autonomous spacecraft
with an electrodynamic tether that can capture debris and move them into grave
orbits, proposed by Tether Application Inc. (Inc. 2013). Others try to learn from the
experience of fishing net companies to develop technologies for cleaning up space
debris. Space agencies should encourage the creation of programmes under which
space companies could develop technology solution and services to that effect
(Fig. 6.5).
They could target the development of services around the Clean Space initiative,
particularly in the context of active debris removal. Certain companies may spe-
cialize in developing models for predicting space debris growth, risk analysis and
for capturing debris. Knowledge from the other industries like robotics, IT and the
fishing industry could be used to develop prediction models, technology solutions
and tools for space debris removal and prevention.
The space debris market is a transversal market, and its growth will result in the
development of technologies and concepts such as in-orbit satellite servicing, like
refuelling, repairs and many others.
The immediate market opportunity could be exploited by NewSpace companies
with competencies in constructing and operating CubeSats and by companies
providing commercial space transportation services. Space agencies could leverage
the creation of public-private partnerships, similar to the ones created by ESA or EC
with joint ventures or the NASA COTS model.
There will be a need to develop approaches for financing space debris removal
like a bounty system that will estimate the potential revenues for private companies
that are involved in space debris removal. The proposed framework computes the
expected damage that each space debris object can cause to existing orbital systems
as a function of debris mass, velocity, orbit and other characteristics in conjunction
with the orbit, size, and monetary value of orbital systems in operation. Using these
damage estimates, we then assign to each unit of space debris a monetary bounty
amount that could be paid by an international space debris bounty fund to the
company that de-orbits the debris.
In order to address the growing space debris threat, space agencies will have to
set up programmes with economic incentives to attract private companies to
develop solutions for space debris removal.
Fig. 6.6 Hubble telescope repair (NASA, On-Orbit Satellite Servicing Study 2010)
6.8 Conclusions
The growing threat to human life, to satellites and to the aviation industry from risks
of space debris collision demands the undertaking of clear steps for debris mitiga-
tion. These steps give rise to the following questions: are there any economic
incentives that could encourage private companies to address the problem of
removing space debris? Can there be space debris services, tools and solutions
developed by private companies? Which are the customers and the targeted mar-
kets? Is it feasible to have space debris removal missions leveraging on commercial
partnerships between space agencies and the industry? Is the COTS model also
relevant to space debris mitigation? How is space debris mitigation going to be
financed? How can NewSpace companies contribute to space debris mitigation?
Are there economic benefits for the global economy from creating a space debris
service and solutions?
Governments owning satellites and space stations in orbit may even start con-
sultations with their national space agencies and national air traffic controller
organizations for setting up centres for space traffic management.
NewSpace companies need to have the economic incentive to invest in devel-
oping technological solutions for space debris avoidance, protection, removal and
prevention.
The ESA Clean Space initiative aims at providing an insight into the technolog-
ical advancement achieved to date in the fields of space debris mitigation (SDM)
and active debris removal (ADR).
In the future ESA could set up a programme, similar to the ESA ARTES 21 IAP,
under which private companies would develop solutions to terrestrial problems
using space-based technology (telecommunications, earth observation and naviga-
tion systems). ESA could also lease to private companies the platform for
de-orbiting old satellites provided private companies have strong economic incen-
tives to do it. Thus, once the platform is operational they could become the
commercial players responsible for its commercialization. Knowledge from other
industries like robotics, IT and the fishing industry could be used to develop
prediction models, technology solutions and tools for space debris removal and
prevention.
6.8 Conclusions 105
Possible approaches for financing space debris removal include the proposed
bounty system for space debris removal to help estimate the potential revenues for
private companies engaging space debris activities.
This environmental challenge is a new market opportunity not only for the space
industry but also for companies developing different concepts for space debris
removal and avoidance. In addition it may result in the development of new
competencies in in-orbit satellite servicing.
Space agencies will probably encourage the creation of public partnerships for
future development of space debris removal concepts and exploitation of new
market opportunities.
Chapter 7
Sub-orbital Markets
7.1 Introduction
The dream of sub-orbital flights started to become a reality in 2004 when Burt
Rutan won the Ansari X prize with SpaceShipOne that was dropped by the White
Knight motherplane (built by Scaled Composites). Just before winning the prize,
Richard Branson announced the creation of a partnership between Virgin, Scaled
Composites and Mojave Aerospace Ventures called Virgin Galactic that aimed at
creating a sub-orbital space tourism business. He initiated the emergence of a
completely new spaceflight industry, marked by the creation of new sub-orbital
reusable vehicles for crew and cargo transportation.
The successful flight of SpaceShipOne inspired the setting up of space entrepre-
neurships in the USA as well as in Europe which leads to the appearance of
European sub-orbital companies, such as Virgin Galactic, Copenhagen Suborbitals
and Booster Industries, investing in the development of new sub-orbital vehicles
and exploiting new market opportunities. This encouraged certain European coun-
tries to1 research possibilities to build spaceports, such as the Swedish spare port
and the Dutch Caribbean spaceport.
7.2 Stakeholders
In 2016, the main actors in the sub-orbital market were private investors, manu-
facturers/operators, customers, service providers, traditional space companies,
insurance and legal companies and customers. In contrast to the traditional space
industry, in which space agencies encourage the growth of national space compa-
nies, there are a number of private investors in the emerging sub-orbital industry,
1
Swedish spaceport, the Dutch Caribbean spaceport.
e.g. Paul Allen, Richard Branson, Jeff Bezos, etc. They are investing in sub-orbital
vehicle development, provision of new sub-orbital services, development of new
markets and definition of new business models for creating sustainable SRV
operations, as presented in Fig. 7.1.
Manufacturers/operators and investors in the sub-orbital space industry first
emerged in the USA and were followed by Europeans, such as Virgin Galactic,
Booster Industries, Copenhagen Suborbitals and many others. In addition, the
competition between the manufacturers/operators and service providers will
increase in certain markets (the astronaut markets), and interdependencies between
stakeholders will emerge.2 The development of sub-orbital vehicles evolves
through phases, and different stakeholders are at different stages of development,
as presented in Fig. 7.2.
In 2016, Blue Origin achieved successful last three flights of their vehicle New
Shepard.3 While Virgin Galactics Unity sub-orbital vehicle is expected to shortly
2
Certain authors recommend the use of Game theory and value net approach for analysing the
evolution of the different roles of the players in the human spaceflight training industry (Henwood
2014).
3
The first flight on November 23, 2015, reached 100.5 km; January 22, 2016, reached 101.7 km;
and April 02 reached 103.8 km.
7.2 Stakeholders 109
enter in the operations phase, others, as the one of Booster Industries, have entered
the planning and design phases.
The targeted customers for sub-orbital services are quite diverse. In 2004, after
the successful flight of SpaceShipOne, it was strongly believed that wealthy
individuals and private companies would be the prime customers for using the
services of sub-orbital vehicles. Regardless of the strong interest of private citizens,
manufacturers/operators started to diversify their services and look at developing
additional services that could use their vehicles for parabolic flights, EO services
and microsatellite deployment (Table 7.1).
The sub-orbital companies in the USA and Europe have different opportunities
for sub-orbital development and operations. In Europe, they have easy access to
SME space engineering competencies and research institutions willing to cooperate
but a complex legal framework due to the airspace sovereignty of EU national
states. The role of the big traditional space companies, at least in Europe, is more of
an advisory and observer role; the traditional European SME is actually focusing on
partnering with emerging NewSpace companies. If the sub-orbital R&D markets
grow successfully, an immediate need will appear for competencies in designing,
constructing and integrating experiments on board the sub-orbital vehicles, which
will make the role of traditional space companies more important.
In the USA, companies have the opportunity to have experimental flight
licences, and companies seem to have easier access to private funding in contrast
to their European counterparts. The NASA Flight Opportunity programme (see
Chap. 1) offers opportunities to research organizations to fly their payloads on
board sub-orbital platforms (e.g. Virgin Galactic, Xaero). As already discussed in
Chap. 1, this programme allows to test vehicles, build their flight reliability and
learn how to integrate R&D payloads in their vehicles. At present, there is no
110 7 Sub-orbital Markets
In 2004, the world witnessed a historic moment when SpaceShipOne won the
Ansari X prize for the first sub-orbital flight. SpaceShipOne was built by Scaled
Composites owned by Burt Rutan and cofinanced by the Microsoft co-founder Paul
Allen. Just a few days before winning the prize, Richard Branson announced the
7.3 Sub-orbital Reusable Vehicle Lessons 111
take for these markets to develop? It should be kept in mind that so far the
development of the sub-orbital space industry has taken 12 years and that
sub-orbital companies do not have a low-risk market that could provide them
with a steady stream of revenues or permit them to survive without space agencies
support. And certain companies have underestimated the complexity and critical
importance of safety requirements.
Certain companies have underestimated the complexity and critical importance
of safety requirements.
There are some positive lessons which sub-orbital companies learnt; e.g. they
realized that the space tourism market is short term and volatile. Therefore, certain
companies started to look at using the SRV for microsatellite launches and for
flying R&D payloads on board these vehicles. The questions SRV service providers
will have to answer to future customers are as follows: Are they willing to fly their
R&D payloads on board their vehicles? Is 4 minutes of microgravity for performing
their experiments enough for their experiments?
The competitive nature of the sub-orbital industry brought some positive trends
in the new technology developments, as the successful launch of the reusable
sub-orbital vehicle New Shepard. However, in the last few years, the industry has
come under increasing pressure to start performing regular sub-orbital flights and
demonstrate its commitment to its customers. As of now, some of the NewSpace
companies involved in the industry have failed to launch regular sub-orbital flights.
Some sceptics are starting to question whether the sub-orbital market hype 10 years
earlier has been no more than just another toy for the rich. From now on, sub-orbital
companies will not only have to perform but will also have to prove that they are
capable of developing long-term sustainable markets and of creating new market
opportunities.
Likewise, SRV companies, developing new vehicles, are exposed to technology
and certification risks, combined with market and budgetary risks. This may lead to
sudden budgetary cuts due to venture capital withdrawal or change of direction of
investor interest towards safer and more profitable businesses. The lessons learnt in
the last 12 years from the SRV industry could be quite beneficial for future
NewSpace companies involved in projects relating to in situ resource utilization
(ISRU). The companies involved in projects linked to asteroid mining and space-
based resources exploitation may face similar questions.
At present, sub-orbital companies are operating in an extremely complicated
environment, in which first they need to demonstrate their capability to build and
provide safe sub-orbital flights to the public and at the same time attract and secure
private financing for building and operating their sub-orbital vehicles.
In the early days of sub-orbital market evolution back in 2004, the targeted market
was human spaceflight for tourism or training. However, with the sub-orbital
vehicle development, markets like Earth observation (e.g. remote sensing), R&D
7.4 Targeted Sub-orbital Markets 113
Fig. 7.3 Sub-orbital commercial markets (Group T. T., Suborbital Reusable Vehicles: A 10 year
forecast of Market Demand 2013)
Fig. 7.4 Forecast of market demand for sub-orbital services (Group T. T., Suborbital Reusable
Vehicles: A 10 year forecast of Market Demand 2013)
In the three scenarios, the demand for commercial human spaceflight is expected
to be the highest, with a reference of todays scenario (e.g. baseline) of a forecast of
335 seats the first year and growing up to 400 seats by the next 10 years. This is a
realistic scenario as certain sub-orbital companies claim they have 700 expressed
registrations for flying on their sub-orbital vehicles that have been confirmed
(Galatic 2016). An earlier research performed by the Tauri Group (Group T. T.,
Suborbital Reusable Vehicles: A 10 year forecast of Market Demand 2013) claimed
that by 2012 there were around 925 seats4 booked for flight experiences. So, the
data show that the baseline scenario is quite conservative.
In addition to space tourism, there are two other important markets identified by
the authors: the basic and applied research market (e.g. R&D markets) and the
educational market. The first one corresponds to the R&D markets, which is already
mentioned in the section Commercial Space Markets Overview, concerned with
flying material science and biomedical experiments on board the sub-orbital vehi-
cles. The second one is the educational market about flying educational payloads on
board the sub-orbital vehicles and integrating similar experiments to the ones under
NASA Flight Opportunities programme.
The microsatellite deployment market is considered by many experts to be a
promising one as it is of strong interest to several sub-orbital companies like Virgin
Galactic. The sub-orbital vehicles can be designed to launch small satellites into
low Earth orbit (LEO) (Federal Aviation Administration 2005), and it is a market
for microsatellites that are not well exploited. For example, VG is planning for a
price below USD10 million to launch 200 kg in Sun-synchronous orbit (Galactic),
thus looking not only at tapping in this new market but also at developing it.
4
The bookings include information only of the following companies: Armadillo, Blue Origin,
Virgin Galactic and XCOR.
7.4 Targeted Sub-orbital Markets 115
is in the range of USD95,000, while with Virgin Galactic the price is between
USD200,000 and USD250,000 per seat (NASA, Emerging Space, The evolving
landscape of 21st Century American Spaceflight 2015b). In 2004, a ticket was
expected to reach a maximum price of USD200,000; in 2016 it reached up to
USD250,000 or even higher. The prices for sub-orbital seats will be influenced by a
number of factors, such as the expected return of investment, profitability, demand
fluctuations, spaceport taxes and flight permits. In the early days of sub-orbital
operations, prices are expected to be higher and to drop when the demand for
sub-orbital flights increases. Yet, prices per seat may go up due to unexpected
regulatory hurdles for acquiring flight permit or economic recession.
In 2004, the dream of sub-orbital tourism just emerged and captured the imag-
ination of many visionaries, entrepreneurs and citizens. In order to promote space-
flights and attract participants, manufacturers/operators and service providers
offered to give away seats for different prizes, and between 2004 and 2012, more
than 15 seats were won through those prize competitions.
Regardless of the high number of registrations for sub-orbital flights, citizens
and non-space entrepreneurs underestimate the complexity, safety regulatory
requirements and time consumption of developing sub-orbital vehicles as well as
the risks of tragic accidents and the ensuing negative publicity for the sub-orbital
space tourism market. The assumption that there is a big market for sub-orbital
flights or that its creation is easy may be quite misleading in a complex and volatile
environment in which the sub-orbital companies operate.
The fast rate of growth of space tourism market depends on several factors: first,
the successful achievement of regular, safe and reliable sub-orbital operations;
second, good economic conditions permitting wealthy citizens to have sufficient
funds to buy seats; and third, the presence of low regulatory hurdles for obtaining
flight permits for sub-orbital vehicle operations.
The opportunity to fly R&D experiments on board sub-orbital vehicles and perform
environmental research is a completely new challenge for the pharmaceutical,
biotechnological, medical and other devices. The R&D markets will also include
the STEM research community where PhD researchers can fly experiments on
board SRV in a similar manner as they fly them on parabolic flights.
The R&D markets have not entered the nascent stage of development yet, and
manufacturers/operators and service providers are not familiar with the existence of
these markets. At present, the idea of flying R&D experiments on board sub-orbital
vehicles is already in the air, but there is limited public research to analyse the
existing opportunities and benefits along this line. The question that comes to mind
is whether sub-orbital entrepreneurs can learn lessons from R&D research on board
the ISS. Figure 7.5 presents a general overview of the targeted R&D markets for
sub-orbital vehicles. They are divided into R&D and emerging markets, as
116 7 Sub-orbital Markets
Drug development
Cell and tissue
engineering
R&D markets
R&T
Biotechnology Osteoporosis
Medical equipment
Health Sports equipment
Nutrition
Environment
Earth observation
and protection
New materials
7.5 Conclusions
Space tourism and the R&D markets are at present the primarily targeted markets of
sub-orbital manufacturers/operators and service providers. The space tourism mar-
ket is a fast-growing market, albeit complex and volatile, due to the time needed to
develop sub-orbital vehicles and high safety regulatory requirements. The growth
of the market will depend on the successful achievement of regular, safe and
reliable sub-orbital operations and good economic conditions permitting wealthy
citizens to have sufficient funds to buy seats. Finally, sub-orbital companies will
have to be exposed to low regulatory hurdles for obtaining flight permits for
sub-orbital vehicles operations.
SRV companies developing new vehicles will be exposed to technology devel-
opment and certification risks, combined with market and budgetary risks which
may lead to sudden budgetary cuts due to venture capital withdrawal or change of
direction of investor interest towards seeking safer and more profitable businesses.
The lessons learnt in the last 12 years from the SRV industry could be quite
beneficial for the future NewSpace companies involving projects related in in situ
resource utilization (ISRU). The companies with projects linked to asteroid mining
and space-based resources exploitation may face similar issues. At present,
sub-orbital companies are operating in an extremely complicated environment, in
which they both need to demonstrate their capability to build and provide safe
sub-orbital flights to the public and attract and secure private financing for building
and operating their sub-orbital vehicles.
The sub-orbital R&D markets will cover a wide variety of markets from phar-
maceutical to medical device testing and research in areas, such as the cardiovas-
cular system, blood pressure and others. The R&D markets may evolve with the
expected retirement of the ISS in 2024, as space agencies may start relocating their
ISS R&D experiments on sub-orbital vehicles. Other space agencies like ESA and
JAXA might also implement programmes similar to the NASA Flight Opportunities
programme.
Countries willing to encourage the growth of the sub-orbital industry will have
to first perform an analysis of the research and innovation benefits of having a
sub-orbital industry. If they decide to go ahead, they may offer zero tax benefits to
118 7 Sub-orbital Markets
8.1 Introduction
Spaceports are critical for the commercial space transportation operations of orbital
and sub-orbital flights. They provide the necessary facilities, ground control and
runway/launch pads and in the future are also expected to host passenger training
facilities, visitor centres, hotels and other types of attractions (Pelt 2011). The
expected growth of orbital and sub-orbital flights encourages the emergence com-
mercial spaceports throughout the USA and now in Europe. Spaceports are the sites
for launching orbital and sub-orbital vehicles in space. They will offer facilities for
vertical and horizontal takeoff and landing. Spaceport sites are supposed to inte-
grate launch vehicle components, fuel, and maintain vehicles as well as payloads
into the vehicles (FAA 2016, The Annual Compedium of Commercial Space
Transportation: 2016).
The expected growth of commercial space services of commercial for both
orbital and sub-orbital transportations will encourage the adaptation, refurbishment
and even construction of new spaceport sites. Certain European countries, like
Sweden, have already built spaceports, while others like the Netherlands and the
UK have launched the idea and are performing feasibility studies for constructing
national spaceports.
8.2 Stakeholders
Spaceports offer orbital and sub-orbital companies to sign lease agreement to use
their premises for their flight activities. National governments or states invest
taxpayers money in the construction and development of these long-term infra-
structure projects which are considered valuable public utilities. Providing they
have a permit, commercial spaceports could be privately owned and developed as
1
Facilities include terminal hangers, propellant facilities, payload integration facilities, fuel
handling, vehicle integration/checkout and others.
2
Certain spaceports like the Swedish Space Port offer the possibility to watch the Northern Lights.
8.2 Stakeholders 121
Most of FAA-AST licences will expire between 2016 and 2020, and sub-orbital
companies using the spaceports above will be exposed to the pressure to launch and
initiate successful operations by the end of the licence expiry. Since the sub-orbital
space industry is hardly expected to grow, it is possible that after 2020, there would
be fewer licensed spaceports for sub-orbital launches.
At present European governments are observing the evolution of the orbital and
sub-orbital commercial space transportation services. With the expected growth of
sub-orbital launch services, European governments may unite forces and offer to
SRV companies the opportunity to lease the certain facilities from the spaceport in
French Guiana, Kourou, or contract additional facilities.
At present, information about commercial spaceports in other countries is
limited; there is detailed information about government-owned spaceports. For
example, Russian space companies are expected to start using the Vostochny
Cosmodrome, Baikonur Cosmodrome, Plesetsk Cosmodrome and Dombarovsky
Air Base before 2020. Japan has two active governmental launch sites Tanegashima
Space Center and the Uchinoura Space Center. China operates three institutional
launch sites: Jiuquan Satellite Launch Center, Taiyuan Satellite Launch Center and
the Xichange one.
In India the Indian Space Research Organization (ISRO) operates Indias sole
launch site the Satish Dhawan Space Center (FAA 2016, The Annual Compedium
of Commercial Space Transportation: 2016).
The USA is the pioneer and leader in construction, development and leasing of
commercial spaceports for orbital and sub-orbital launches.
In recent years new trends have emerged and national space agencies are leasing
their spaceports to companies like SpaceX and others. Fully commercial spaceports
have to primarily rely on attracting commercial customers. Therefore, they need to
develop a medium- and long-term strategy for viable business models and to
implement profitable business cases. Commercial spaceports may become potential
hybrids between space cosmodromes and airports. For example, certain spaceports
may have to provide services typical for launch sites, like vehicle processing,
payload integration services, storage services and others (Fig. 8.2).
Future spaceport services may be a mixture between launch and airport services
and offer a wide range of services as information, mobility, crew/cargo manage-
ment, mission control services, security management, entertainment, medical ser-
vices and many others.
8.3 Targeted Markets/Services 123
System SECURITY
Elements
OR OR
Stages Vehicle Processing
Interstage
Other elements
OR
Payload Payload Processing
OR
SRBs Storage Facility
Fig. 8.2 Launch vehicle integration and processing scheme (FAA 2016, The Annual Compedium
of Commercial Space Transportation: 2016)
8.3.1 USA
The USA is the pioneer in the construction of commercial spaceports. They are
classified by FAA-AST which licensed launch sites both for orbital and sub-orbital
vehicles. In the USA, companies can obtain FAA-AST experimental permits: for
example, in 2015 Blue Origins New Shepard flew twice using FAA-AST experi-
mental permit, with the second flight achieving a historic milestone by becoming
the first vehicle to launch vertically, enter space (100.5 km) and land vertically
(FAA 2016, The Annual Compedium of Commercial Space Transportation: 2016).
In the USA, there are nine FAA-AST-licensed commercial sites in partnership
with the private industry which is managed by a university. Four sites are dedicated
to orbital launch activity, nine facilitate sub-orbital launches only and five can host
both types of operations (Table 8.2).
Between 2016 and 2020, most of FAA-AST licences will expire, and sub-orbital
companies using the spaceports above will be exposed to the pressure to launch and
initiate successful operations by the end of the licence expiry. Since hardly any
growth of the sub-orbital space industry is expected, it is possible that after 2020
there would be fewer licensed spaceports for sub-orbital launches.
The most popular sub-orbital spaceports are the spaceport of America and
Mojave Air and Space Port.
Spaceport America is the first commercial spaceport constructed in 2011, with
the vision to encourage affordable, efficient and effective access to space by
developing and operating the first purpose-built commercial spaceport (America
2016). The spaceport is built to accommodate both vertical and horizontal launches
of aerospace vehicles and is owned and operated by the State of New Mexico. It
invested $209 million USD (FAA 2016, The Annual Compedium of Commercial
124 8 Spaceports
Table 8.2 FAA-AST-licensed launch sites (FAA 2016, The Annual Compedium of Commercial
Space Transportation: 2016)
Licence Types of
first launches
Launch site Operator issued Expires supported
California Spaceport Systems 1996 18/09/2016 Orbital
Spaceport International
Mid-Atlantic Virginia Commercial 1997 12/18/2017 Orbital
Regional Spaceport Space Flight Authority
VA
Pacific Spaceport Alaska Aerospace 1998 23/09/2018 Orbital/sub-
Complex Alaska Corporation orbital
Cape Canaveral Space Florida 1999 30/06/2020 Orbital/sub-
Spaceport orbital
Mojave Air and East Kern Airport District 2004 16/06/2019 Sub-orbital
Space Port
Oklahoma Oklahoma Space industry 2006 11/06/2016 Sub-orbital
Spaceport development authority
Spaceport America New Mexico Spaceport 2008 14/12/2018 Sub-orbital
Authority
Cecil Field Jacksonville Aviation 2010 10/01/2020 Sub-orbital
Spaceport Authority
Midland Interna- Midland International 2014 14/09/2019 Sub-orbital
tional Airport Airport
Ellington Airport Houston Airport System 2015 25/06/2020 Sub-orbital
Space Transportation: 2016) in the construction of the spaceport with the vision to
attract NewSpace companies to use the spaceport. Initially Virgin Galactic3 signed
a tenant agreement for 20 years, followed in 2013 by SpaceX that signed a 3-year
lease for the use of the site for the launch, recover and reuse of Falcon 9V1.1.
booster (FAA 2016, The Annual Compedium of Commercial Space
Transportation: 2016).
Mojave Air and Space Port is actually a test centre and a launch and re-entry site
for horizontal launches of reusable spacecraft. It is a licensed FAA-AST since 2004
and has become one of the most important locations for the emergence of the
sub-orbital industry. In 2016, there were already 60 companies involved in the
design, building, testing and operations of small sub-orbital vehicles.
If in 2004 putting money in the development and operations of commercial
spaceports in the USA seemed a good public investment for encouraging regional
economic growth at present, this looks less feasible since the sub-orbital space
industry is still in its emerging state, and spaceports come under pressure to increase
the number of their leasing agreements, have a clear business case and generate profits
to cover the operating costs. With the expected expiry of the FAA-AST licences, the
political and regulatory pressure on the US commercial spaceports will increase.
3
Initially the port was constructed to host two WhiteKnightTwo aircrafts and five Virgin Galactic
SpaceShipTwo spacecrafts.
8.4 Conclusions 125
8.3.2 Europe
Several European countries like Sweden, the Netherlands and Portugal are operat-
ing or planning to construct commercial spaceports.
Besides the Swedish Space Port, there are ongoing discussions for the construc-
tion of a Caribbean spaceport that will be the home base of the XCOR flight
operations. In the Portuguese Azores islands, the government is considering to set
up a partnership with a few Atlantic countries, including the USA to build a
spaceport for small satellite launches.
The Swedish Space Port is located in Kiruna, Sweden, and its aim is to become
the leading spaceport for commercial spaceflights. It was inaugurated in 2007, and
the first customer of the spaceport was Virgin Galactic which signed an agreement
with the spaceport to be its first non-US-based spaceport. In 2012, the spaceport
launched a spaceflight preparation programme and in 2013 a parabolic flight
programme with AirZero G and Novaspace companies.
The Swedish Space Port has already diversified its services and focused on
providing operational parabolic flights and spaceflight preparation programmes. It
is expected that the spaceport will sign agreements with other NewSpace compa-
nies and in this way diversify the risk of relying on Virgin Galactic as a prime
customer.
8.4 Conclusions
The USA is the pioneer and leader in the construction and operations of commercial
spaceports. European countries are still waiting to see if the commercial sub-orbital
industry will take off although it is possible that Europeans would go on to create
their one intergovernmental sub-orbital spaceport in a similar manner as the ESA
spaceport or lease parts of the current one. EU countries may look at cooperating
with the USA for building commercial spaceports for smallsats launches.
Commercial spaceports of the future may become potential hybrids between
launch cosmodromes and airports, while their services will be a mixture of both.
Spaceports will need to have viable business cases, increasing lease agreements and
generating cost-effective services. That will lead to having even commercial
mission control services, therefore avoiding spaceports carrying the high cost of
mission control responsible for the launch campaign and operations.
The expected growth of the commercial orbital and sub-orbital industry will
result in an increased number of feasibility studies to build spaceports. It will also
result in the FAA granting flight licences to spaceports after 2020.
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Index
A Avoidance, 96
Abu Dhabi, 6 Axe/Lynx, 111
Additive manufacturing, 69 Axiom, 77, 88
Advertising, 83
Airbus A340, 99
Air-launch, 77 B
Air Revitalization System (ARS), 11 Baikonur Cosmodrome, 122
Air traffic, 98 Basic and applied research, 7
Alloys, 82 BEAM module, xi, 5, 58, 85
AlphaSparks, 32, 77 Benefits, 43, 80
Aluminium, 49 B612 Foundation, 32
Angel investors, xii Bigelow Aerospace, 32
Ansari X Prize, 7, 107 Bigelow space stations, 4, 8586
Antares, ix, 74 Biochemistry, 88
Antares launch vehicle, 9 Bio-engineering, 70
Anti-satellite weapon (ASAT), 93 Biolab, 44
Ares 1/Ares V rockets, 2 Bio-materials, 82
Ariane 5, 12, 18 Bioreactor, 82
Ariane 6, ix BioServe, 77
Arianespace, 18 Biotechnology, 83
Arkyd telescopes, 68 Blood measurement instruments (BMI), x
Armadillo Aerospace, 21, 114 Blue Origin, 8, 11, 18, 21, 32, 110, 114
ASICS, x Blue Origin Orbital, 32
Asteroid, 67 Blue Origin West Texas Rocket Flight Facility,
Asteroid mining, 68 121
Asteroid Redirect Mission (ARM), viii, 16 Boeing, 8, 11, 32
Astrobotic Technology, 15 Bone density, 44
Astronauts, 5 Bone loss, 44
Astroscale, 97 Booster Industries, 32, 107, 110
Atlas 5, 74 Bottom-up research, 57
ATV, 10 Budgetary reductions, 46
Automation, 63 Bulgaria, 40
Aviation, 98 Business case, 26
Aviation safety, 9899 Business models, 18, 72
C Cost, 39
Canadarm2, 85 overruns, 71
Cancer research, 82 recovery, 46, 78
Capital, 80 Cost savings, 18
Caribbean Spaceport, 32, 107, 110 COTS, ix
CCDev, viii, ix, xi Craters, 64
CCDev 1, 10 Crew/cargo management, 122
CCDev 3, 12 Crew Exploration Vehicle (CEV), 1
CCiCAP, 10 CRS, 1, 87
CCP, 12 CrystalCards, 88
CCSC programme, 15 CSA, 77
Cell/tissue engineering and medical device CST-100, 11
testing, 6 CST-100 Starliner, viii
Center for the Advancement of Science in CST-100 vehicle, 74
Space (CASIS), 76 CTS-100, 5
Centrifuges, 121 C-type asteroids, 66
Cerise, 94 Cuba, 40
Challenges, 71 CubeSats, 22
Chandrayaan-2 mission, 56 Cultural projects, 78
Chang landers, 56 Customers, 24, 26, 33, 91
China, 56 Cygnus, viii
Cis-lunar space (CLS), 25 Cygnus spacecraft, 9
Citizens in Space, 32 Cygnus vehicle, x, 5, 74
CleanSat, 100
Clean Space initiative, 99
CNES, 99 D
CO2, 64 DARPA, 5, 102
Cobalt, 49, 64 Deep Space Industries, 32, 66, 68
Columbus module, 76 Deimos, 69
Commercial cargo, 5 Deimos Imaging, xii
Commercial Crew Development (CCDev), 8 Demand, xi, 45, 71, 80
Commercial Crew Development Denis Tito, x
2 (CCDev2), 10 De-orbiting technologies, 96
Commercial Crew Transportation Capability DigitalGlobe, xii, 3
(CCtCap), 13 Direct benefits, 18
Commercialization, vii, 23, 24, 77 Disruptive technology innovation, xi, xii
Commercial Products Contract (CPC), 13 Diversify, 38
Commercial Space Federation, 32 Dombarovsky, 122
Commercial space markets, x, 21, 24 Dragon, viii, x, 74, 85
Commercial space transportation markets, 18 Dragon capsule, 10
Commercial space transportation services, 18 Dream Chaser, 11, 74
Commercial Transportation System (CTS), 11 Drug development, 82
Commercial ventures, 46 Dynetics, 7
Competition, 24, 61
Composite pressure vessel, 11
Constellations, 95 E
Copenhagen Suborbital Dassault Aviation Earth, 49
Vector Space Systems, 32 EcoDesign, 100
Copenhagen Suborbitals, 107, 110 Economic benefits, 17
Cosmica airplanes, 32 Economic impacts, 18
Cosmonauts, 40 Economic incentives, 100
Index 135
Economics, viii G
Economies of scale, 14 Game theory, 108
eDeorbit, 100 Gap, 33
EDT systems, 100 Generation Orbit Launch Services, 7
Education, 83 GEO satellites, 3
Edutainment, 70 Global cooperation, viii
Electrodynamics tethers, 100 Golden Spike, 32
ELIPS programmes, 76 Google Lunar X Prize, 5, 51
Emergency Detection System (EDS), 11 Governmental customer, 38
Emerging commercial space markets, xi Governments, 17, 119
Emerging markets, 83 Grand Challenge, ix
Employment, 18
End-users, 80
Entertainment, 27, 83, 122 H
Environment, 83 H2020, 98
Environmental Control and Life Support Habitation, 63
System (ECLSS), 11 Hamilton Sundstrand, 89
EO systems, xii Hangers, 119
ERISTO, 83 Health, 83
ESA, x, 16 Helium 3, 15
ESA Columbus, x Hepatitis C, 84
EU, 18 High-intensity discharge (HID), x
Europe, ix, x H-II, 10
European Drawer Rack (EDR), 44 Honeywell, 77
European SME, 109 Hubble telescope, 36
European space, xi Hungary, 40
EU Space Strategy, 18, 110 Hydrocarbons, 72
Eutelsat, 18 Hydrogen, 64
Evolvable Lunar Architecture (ELA), 56 Hypobaric chambers, 121
exactEarth, xii
Excalibur Almaz, xi
Exoliner, 74 I
ExoMars, 16 IIASL, 110
EXOS Aerospace, 121 India, 56
Expandable Bigelow Advanced Station Indirect benefits, 18
Enhancement (XBASE), 85 Industrial applications, 84
Industrial Space Facility (ISF), 35
Industry dependence, xi
F Inflatable modules, xi, 73
FAA, 4 Innovative Lunar Demonstration Data (ILDD)
Falcon launchers, ix programmes, 10, 20
Falcon 9 rocket, xi, 74 In-orbit satellite servicing, x, 28, 102104
Ferrous metals, 63 In situ resource exploitation, 24
Financing, 68 In situ resource extraction, 28
Flight licences, 109 In situ resource utilization (ISRU), 2
Flight opportunities programme, 1314 Inspirational dimension, viii
Fluid Science Laboratory (FSL), 44 Inspiration to Mars, 32
Fragments, 93 Interdependencies, 31
Free market economy, 40 Interkosmos programme, 40
Frenzied, 22 International Space Exploration Coordination
Fuel handling, 119 Group (ISECG), 65
Funded Cargo SAA, 8 International Space Station (ISS), vii, xi, 4, 74
Funded Crew SAA, 8 brand, 45
136 Index
U Volvo, 111
Uchinoura Space Center, 122 Vostochny Cosmodrome, 122
ULA, 3, 32
Uncontrolled re-entry, 98
Unfair competition, 14 W
Unfunded Crew SAA, 8 Waste management, 82
United Launch Alliance (ULA), 8, 11 Water, 64
Unknown R&D customers, 79 White Knight, 107
UP Aerospace, 13, 32, 110 Willis Inspace, 110
USA, 8 World View, 13
US Constellation programme, 1
US DoD, 5
User-driven, 90 X
User-friendly conditions, 45 Xaero sub-orbital vehicles, 13
UTC, 77 Xbase station, 88
Utilization, xii XCOR Aerospace, 7, 21, 32, 110, 114, 121
XCOR Lynx, viii
Xichange one, 122
V
Value chains, 24
Vehicle integration/checkout and others, 119 Z
Venture capitalists, xi Zero Gravity, 32, 83, 110
Vicetris, 84 Zero2Infinity, 32
Virgin Galactic, 6, 13, 32, 110, 114 Zubrin, 69
Vision for Space Exploration (VSE), 1