Luxembourg’s space sector is about to undergo a top level strategic review, with a reassessment to be made of the ambitious approach taken in recent years. This takes place against the background of the country’s satellite giant SES SA also reorienting itself.
That the Grand Duchy hosts the headquarters of SES as one of the world’s largest satellite companies has its origins in the targeted efforts of successive governments in the 1980s. Government initiatives at the time sought to diversify the economy away from dependency on steel production, and, just like the prospect of further financial integration in the EU, the coming communication satellite revolution looked plausible. So rather than using the geostationary orbit assigned to Luxembourg for defence or metrology purposes as was standard, SES was established as a public private partnership.
Space cluster created
The service attracted the interest of players in Germany and the UK in the early 1990s, with this strength in Europe helping the company to go global. Last year SES had turnover of 1.78 billion euro, employing more than 2,000 people of which 650 in the Grand Duchy, and delivering a total of 8,386 TV channels.
The expertise generated and attracted to Luxembourg by SES and its suppliers led to separate space businesses being created in the country, be they start-ups or investments by international groups. All sought to take advantage of the business development aid offered by the state to high-tech companies.
There are now more than 60 businesses that work directly or indirectly in the space sector. Most are small operations with fewer than ten employees that are part of European and global supply chains.
Others, such as LuxSpace, owned by German aerospace group OHB which has a Frankfurt listing, employ about 50 people to operate their own constellations of microsatellites, as well as providing related components and technologies.
Former Economy Minister Etienne Schneider was quoted frequently as saying the space sector generated 2 percent of the country’s GDP, but this is likely to have been a calculation based on a generous interpretation of the data.
Space mining and more
The national strategy took an ambitious turn in the 2010s under Schneider, in particular with the eye-catching SpaceResources.lu Initiative launched in 2016. This seeks to galvanise international efforts regarding the exploration and use of natural resources in space, efforts that could go as far as seeing asteroid mining. The idea is to exploit metals, minerals, water and other resources on planets and other heavenly bodies, and either use these in space or bring them back to earth.
Despite the sci-fi sounding nature of this activity, it is thought to be a potentially viable, lucrative activity. Luxembourg businesses and public research bodies work to be a global focus for this activity, both in terms of helping to develop the technology but also key details such as legal and regulatory frameworks.
Space Resources
The Luxembourg Space Agency was created in 2018 and the European Space Resources Innovation Centre in 2020. The latter “aims to become the internationally recognised centre of expertise for scientific, technical, business and economic aspects related to the use of space resources for human and robotic exploration,” says its website. The country had already joined the European Space Agency in 2005.
Also eye-catching was the satellite project which caused controversy that, coincidentally or not, preceded Schneider’s departure from politics in February 2020. LUXEOSys is a Luxembourg-German-Belgian defence observation satellite project which was originally budgeted to cost 170 million euro, but this figure quickly jumped to 274 million. Further controversy was caused by the project being assigned to the Luxembourg military, despite them not having the internal expertise to run the project.
Strategic review
Schneider’s replacement at the Ministry of the Economy, Franz Fayot, has been less prone to generating eye-catching announcements about the space industry. Instead, he launched a process in February this year to “review, adjust, and evolve the current national space strategy and adapt it to the needs of a fast-booming Newspace sector.”
However, the government said the objectives of working in this area remain unchanged: economic diversification, skills and expertise enhancement in the economy, competitiveness of businesses and public research actors, and the integration of Luxembourg players in international networks.
Next-generation satellite network
SES itself is also undergoing a strategic reorientation. The broadcast satellite business – which has been the firm’s main earner since it was founded – remains lucrative but is facing secular decline in the face of fibre optic and 5G mobile broadband. Hence the firm is shifting its focus towards offering low-latency network solutions via satellite. A key use is providing aeroplane passengers with broadband internet services and live broadcast links.
Providing these services requires a constellation of medium earth orbit satellites operating in partnership with next-generation geostationary satellites. Of the former, SES is planning to launch 11 of the O3b mPower type. These would work in tandem with the latter type SES-17 which was launched last year.
The space sector is often held up as an epitome of Luxembourg’s ability to exploit niches and adapt to changing circumstances. The next ten years will be important to see if the success of the first four decades can be sustained.