Memorandum 65
Submission from Nigel McNair Scott
BACKGROUND INFORMATION
I am a shareholder in Reaction Engines Limited,
a business to which my family have subscribed £1 million
as equity capital. Based at the Culham Innovation Centre, Reaction
Engines is desiring a reusable space plane Skylon and has developed
leading-edge technologies, in particular in cooling systems (heat
exchangers), which will enable an effective engine for such a
space plane. Skylon has the potential to radically change the
business paradigm for space systems and provide the UK with a
strategic advantage in space launch services.
The wider space sector is a high added value,
high technology, highly skilled industry with science-driven products
and services of the kind that were identified by the Chancellor
in his 2006 Budget Speech as the key to future wealth creation.
Independent estimates predict annual growth of some 15% in the
global space market over the next decade and the UK has the opportunity
to increase its current market share in both systems and applications.
Against this background I have been surprised
by the difficulties that Reaction Engines has encountered in gaining
Government support for Skylon, particularly the lack of strategic
funding for technology risk reduction and development. Such support
is important as it provides the credibility needed to raise equity
capital. This situation is in sharp contrast to the support and
funding available in other ESA Member States (for example Belgium
and France) and must be a contributing factor to the substantial
UK deficit in the system of commercial "juste retour"
under which ESA procurement is conducted.
The issues highlighted by the difficulties faced
by Skylon are the UK Government policy towards space launch services
and the effectiveness of its support for space technology R&D.
I believe that these issues would benefit from consideration by
the Committee as part of its inquiry into space. I am attaching
some background information to support the Committee's discussion.
September 2007
INTRODUCTION
Over the last 15 years, Britain has concentrated
on developing applications in space using other countries' delivery
systems. This puts it at a strategic disadvantage in accessing
delivery, both as to timing and availability. A reorientation
of its policy to becoming a leader in delivery systems will be
to our country's advantage, (a) commercially; (b) technologically;
(c) strategically. That opportunity exists in the Skylon project,
the expertise for which rests in our country.
THE COMMERCIAL
OPPORTUNITY
The development of Skylon will cut the cost
of access to near space by a factor of at least 20. Skylon will
operate like an aircraft, in the hands of competing operators,
and give the customer more control of prices than is currently
possible. It will give investors in the project and the countries
in which it is developed the opportunity to earn a very great
deal of money from a large and expanding market. One of the reasons
I have invested is that I believe Britain will benefit from such
a project.
ESA has employed Reaction Engines to look at
the feasibility of developing an intercontinental plane, using
Reaction Engine's cooling and engine technologies (the "LAPCAT"
Programme). Talks are also in progress about doing a feasibility
study for ESA on the development of a space plane. This will be
done jointly with two other major European aerospace companies.
IMPORTANCE TO
THE COUNTRY
OF ORIGIN
Skylon will allow the UK to maintain and expand
its engineering base and build up its technological base. There
are many other commercial applications for the cooling technology
and other spin-offs from the Programme, for example in materials
technology, reducing fuel consumption in aerospace, reduction
of carbon emissions, more effective electricity plants and in
large cooling systems.
THE BRITISH
GOVERNMENT'S
ROLE
The British Government played a small but important
part in funding the early development of the Reaction Engine's
technology through the DTI SMART Programme (£187,000). This
gave the company credibility to raise its third round of equity
capital of over £1 million. It is important for the British
Government to continue support at some level for the development
of the heat exchanger as:
(a) its imprimatur and the fact that the
project has been subject to technical review gives credibility
to the next round of equity raising;
(b) there would be a negative message to
the European Space Agency and European manufacturers if it was
not there; and
(c) it gives a message to the UK scientific
community that the UK government is prepared to support the emergence
of a major new technology, and more particularly not be obstructive
when the technology reaches maturity.
THE ROLE
FOR EUROPE
There is a gap emerging in the international
market for delivery systems. China and the US are concentrating
on the development of rocket delivery systems for a return to
the Moon and the first manned mission to Mars. This is a very
expensive Programme with substantial problems vis-a"-vis
mobilisation. It also shares technology tied in with military
applications and is unlikely to be shared worldwide. Both countries
would however pay for a low cost delivery system. Europe currently
is dependent upon Ariane5 and Vega with no plans for anything
more economical, and while Japan has been looking at space planes
as an alternative, JAXA's plan does not envisage them being produced
until 2020. At the moment the UK has a substantial lead in the
enabling technology of the cooling systems which will enable the
SABRE engine to be built and power a space plane. This gap gives
a major opportunity to the European space industry to develop
a low cost replacement for conventional rockets and sell vehicles
or production licenses to other nations.
October 2006
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