COLORADO SPRINGS—The space industry faces a “double bind” of insufficient launch capacity in the short term and oversupply in the long run, a report released April 17 by McKinsey & Co. says.
The report was released at this week’s Space Symposium here.
As the cost of launches has decreased, the demand for sending satellites to space has drastically increased. The global consulting firm looked at three scenarios for the future of satellite launches to space. They ranged from the deployment through 2030 of 67,000 satellites on the high end, a midrange of 24,000 and a low end of 18,000 spacecraft on orbit. In this scenario, satellites would be deployed over five years and remain in use for nearly eight years.
Launch capacity is being retooled to meet the demand with a new class of heavy rockets nearing completion, including the Arianespace Ariane 6, Blue Origin New Glenn and United Launch Alliance Vulcan. None is more anticipated than SpaceX’s Starship, for which launch on a major test flight was scrubbed April 17. But those new rockets will take time to reach the kind of peak performance that is expected to bring down costs and allow for a regular cadence of launches.
“In space commerce, there is often a yawning gap between intention and execution,” write Chris Daehnick, John Gang and Ilan Rozenkopf in the report. “A rocket in development is not equivalent to being able to offer an immediate or scheduled ride into orbit. In all cases, we expect a significant ramp-up period, even after a successful first flight.”
And then a rapid rise in the supply of launchers would be anticipated, with the Starship program potentially providing one launch per day by 2030.
An early gap in supply may provide a window, as launch companies that can ramp up quickly can capture market share. “The best-placed launch companies in this context will pursue strategies that maximize flexibility and cost control,” the report says. “This implies design and manufacturing approaches that allow for rapid deployment and scaling of capacity without incurring large fixed or variable costs.”
Launches are vital to building other areas of the market. A study by the Euroconsult strategy firm foresees a market of about $4 billion in 2023-32 for in-space services, but that market is highly dependent on additional growth and reduced pricing in the launch market.
Euroconsult defines this space logistics market as having six components: access to space, active debris removal, last-mile delivery, on-orbit assembly and manufacturing, satellite life extension and space situational awareness.
Governments around the world are the likeliest supporters of the market in this early stage, a summary of the McKinsey report says. They will be investing in technology development and providing initial demand and demonstrations. Space situational awareness is likely to be the largest slice of this market, reaching a value of about $1.8 billion by 2032.
The market for space logistics will likely leverage advancements in the launch industry. They include price reductions flowing from reusable launchers as well as a new generation of launchers that can reach geostationary orbit and super-heavy models. The report “anticipates up to 220 launches per year in the most optimistic scenario, while expecting a threefold launch price decrease over the decade, owing to new design-to-cost value propositions and to the progress of reusability.”
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