Lower costs and miniaturised technology are propelling a new satellite boom, and the latest generation of tech entrepreneurs is racing to capture a share of it.
If your business needs to put a satellite in orbit, you face two problems: the cost of the launch and the cost of the satellite.
First, the launch. When you step aboard a commercial flight to a city, you generally pay somewhere between US$2 and US$5 a kilogram. Flying things to space during the Apollo era cost almost 10,000 times that much – about US$23,000 per kilo. Gradual improvements cut that cost to US$16,000 by the early 2000s.
Then there’s the satellite, packed full of electronics and sensors that traditionally cost millions of dollars.
However, a new generation of launch systems – built by companies such as Elon Musk’s SpaceX and Jeff Bezos’s Blue Origin, and incorporating reusable first-stage rockets – are slashing launch costs to less than US$2000 a kilo. Satellites, too, are getting cheaper, thanks to modern electronics and sensors originally developed for mass-produced mobile phones and similar devices.
“The new accessibility may radically change our activities in space.” Goldman Sachs report
The result is that a particular type of space activity is about to become much more common: the satellite launch to low Earth orbit (LEO), just a few hundred kilometres above the surface of the planet.
This is not the glamorous world of moviedom’s The Martian, with its travel to and from Mars. It’s not even the world of the old Apollo missions that sent 12 people to walk on the moon more than four decades ago. This is cheap, commoditised, everyday space travel for machines, not people, and all done with very specific business aims.
Into the private realm
The business of space looks very different to when it was dominated by government space agencies such as NASA. Launches are growing fast, with 86 orbital launches carrying 196 separate payloads in 2015, according to the US Federal Aviation Administration (FAA). Increasingly, these launches and the payloads they deliver are financed, owned and managed by the private sector.
The FAA estimates the global space industry is now worth about US$324 billion annually, with only 24 per cent of that revenue coming from government spending.
Washington-based consultancy The Tauri Group calculates that more venture capital – US$1.8 billion – flowed into space technologies in 2015 than in the previous 15 years combined. Alongside SpaceX and Blue Origin, a host of nimble start-ups are grabbing the opportunity presented by lower costs.
“Instead of putting out a big, big bird … you put out a constellation of 100 little ones.” Flavia Tata Nardini, Fleet space technologies
Researchers at Goldman Sachs have pronounced affordable access to space “a game changer”. “Space launches now cost 11 times less than five years ago,” they wrote in a briefing note last year. “Satellites can cost 100 times less. Our ability to get to space has changed more in the last five years than during the entire prior period of space exploration.”
The researchers further predicted that costs could plummet by 90 per cent again in the next five years. “The new accessibility may radically change our activities in space,” they wrote.
The Goldman Sachs analysis suggested a new cycle of fast innovation and high growth. In this cycle, more players will enter the space business and build satellite services such as GPS, satellite internet connectivity, precision mapping, space-based Earth imagery and cheap zero-gravity scientific research. “Low launch costs will reshape the satellite industry,” the researchers concluded, “since satellites can now be designed for shorter life expectancies, which disproportionately lower costs”.
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Space technology is shrinking
Just as important has been the rapid evolution of satellites themselves. Digitisation and miniaturisation have radically reduced the time and money needed to build an effective working satellite. Goldman Sachs calculated that today’s satellites can be built for as little as 1 per cent of the cost of models made a few years ago.
This satellite revolution is widely known as “Space 2.0” and it has already fostered a new wave of high-tech start-ups around the world.
One of those start-ups is Adelaide-based Fleet Space Technologies, which designs communication networks based on nano-satellite technology.
Chief executive Flavia Tata Nardini is a former propulsion engineer with the European Space Agency and the Netherlands Organisation for Applied Scentific Research – a rocket scientist, in other words. She calls Space 2.0 “a completely new way of seeing space”.
“The old conventional way of doing space is building a big satellite to put in what we call a geostationary orbit,” says Nardini.
Nardini believes that with the right strategy, the opportunities are boundless. “We are the Facebook of satellites,” she says. “I want to put 1000 satellites up.”
Geostationary orbit puts satellites 36,000km from the Earth’s surface.
“These satellites are big, expensive, super high-tech,” she expands. “It takes an enormous amount of investment – you have to pray that it doesn’t blow up. Then it stays up for 50 years. Imagine – we are using technologies we put in space 60 years ago!”
In contrast, today’s nano-satellites can weigh as little as 10kg each. They can also be deployed in a fraction of the time it takes to get their big predecessors into orbit. “Instead of putting out a big, big bird ... you put out a constellation of 100 little ones in low Earth orbit, 500km from us,” says Nardini.
A lower orbit means lower launch costs, and a constellation of small satellites allows greater geographic coverage for less money.
Nardini notes that satellites play a “massive” role in our lives, largely unseen. You use them “every time you watch TV, you check the GPS in the car, you get money from the ATM … There are satellites all around you”.
Our dependence on satellites could grow in the new world of interconnected objects known as the Internet of Things (IoT). According to a 2015 forecast from Gartner, the number of connected objects will more than triple from 6.4 billion in 2016 to 20.8 billion in 2020. Some of these will rely on a satellite uplink to fix their positions and stay connected – especially if they’re in remote locations.
For Nardini, this interconnected world is the real opportunity for space entrepreneurs. The satellites are simply the platform – connectivity is the true product. “The value is in the data,” she says.
“That’s what we are selling.”
What satellites can do
Thirteen commercial applications for low-cost satellites:
- Remote business and consumer internet services
- Mission-critical data links, such as bank ATMs
- Remote data links for devices such as autonomous mine-site trucks
- Weather monitoring
- Pollution reporting
- Transport monitoring and telematics
- Private data services, such as live television links
- Digital farm mapping for analysis of soil composition and crop health
- Water evaporation analysis in irrigated crops
- Ground movement measurement
- Road fault identification
- Traffic flow monitoring
- Land use analysis for urban planning
The business of space
Global satellite industry revenues grew from US$89 billion in 2005 to US$203 billion in 2014.
More venture capital, US$1.8 billion, was invested in space in 2015 than in all the previous 15 years combined.
In 2015, space launches cost 11 times less than five years earlier. Goldman Sachs forecasts they will fall by another 90 per cent in the next five years.
“Our ability to get to space has changed more in the last five years than during the entire prior period of space exploration.” Goldman Sachs report
The struggle to space
Launching objects into space is hard and costly, in part because of physics and chemistry – especially the physics of what’s called “the rocket equation”. The equation specifies all your constraints: gravity is what it is and fuel weighs a lot, it’s hard to make lighter and you need to take a fair bit of it to achieve low Earth orbit – so there’s not much room for anything else.
In a sense, we’re lucky we can get to space at all. The rocket equation says that if the Earth’s diameter was 20,000km, no rocket that could be built would get anything to space – the fuel would weigh so much that it couldn’t even lift itself. Instead, Earth is 12,756km across and we can get to space – but only just, with tiny payloads. It’s frustrating, but it’s inescapable with our current technologies
How outer space has become the new frontier for economic strength