Master Development Plan For VAFB - California

Vandenberg AFB Commercialization Master Plan Looking towards the FutureProject OverviewThe project has been scoped into threedistinct phases as follows:Phase 0: Art of the Possible(This Document)Intent: Socialize the art of the possiblevision to catalyze funding opportunitiesand arm stakeholders with public talkingpoints for the March 16th MOU signingacross the following entities: Deloitte,U.S. Space Force, REACH, GoBiz, CalPolySan Luis Obispo University ContentIncluded: Clear vision of a commercializedregion and base in both the near andlong term (e.g. 2030)Stakeholder identification andpotential partners with an approachto engage themRequired base capabilities torecognize near term growthopportunitiesPrioritized infrastructure projects,cost estimates, and funding optionsThis document was commissioned by theREACH board in December 2019 toprovide a foundation and stakeholdereducation in support of the developmentof the full master plan in phases 1 and 2Phase 1: Interim Master PlanIntent: Provide the draft Master Planrecommendations and infrastructureassessment to provide opportunities forstakeholder input and collaborationPhase 2: Final Master PlanIntent: Provide final report to informregional decision-making and budgetallocation and assist in formal investorpitches and government funding requestsA note on the project’s current scopeThe MOU holders are currently exploringincreasing the scope to include anadditional focus on the regional economicimpacts and regional requirements toenable the vision for the future. Thesediscussions are currently on going and weexpect the revised scope to be finalized inearly August 2020.A note on the impact of COVID-19This report was primarily producedbetween January 2020 and March 2020with a planned delivery date thatcoincided with the California Shelter-inPlace orders to prevent the spread ofCOVID-19. Efforts have been made toupdate information within this documentas the industry dynamics and marketschanged between March 2020 and July2020. Good faith attempts to keep thisdocument current have been made butdue to the fluidity of the currentsituation, some information may nolonger be applicable. Regardless, webelieve the impact of COVID-19 on ourvision for the future will be more limitedto schedule impacts and should not affectthe ability of the region to attract andgrow space industry activities. Simply put,despite the uncertainty, we remainoptimistic for the future.Members of our team from the State of California Go Biz, the 30th Space Wing, REACH, Deloitte Consulting LLP, and the CentralCoast Communities in front of SLC-6 at Vandenberg during the September 2019 Commercialization Greenhouse Lab.6

Vandenberg AFB Commercialization Master Plan The Art of the Possible for Vandenberg AFBThe Art of the Possible forVandenberg AFBExamining the intersection of industry and market dimensions helps clarify the“where” and “how” to play for a desired future state of space within the CentralCoast RegionSetting the StageThe state of the space industry is strong,but, as with any emerging growthindustry, there are some underlyingfactors which need to be addressed inorder to create a sustainable andeconomically viable vision for the future.Simply put, the old adage of “if you buildit, they will come” or the “Field ofDreams” model does not, and will not,work for spaceport development. As such,we have created a foundational vision forthe future based on a portfolio approachthat spreads focus and risk acrossmultiple segments of the value chain todrive the greatest chance of growingspace within the region. Our initial draftof this vision is presented in this Phase 0report and will be further refined insubsequent phases of this project throughadditional industry engagement andcollaboration with the key stakeholdergroups.To formulate our vision for the future, weperformed in-depth analysis of thecurrent state of the space economy andmarket segments; the launch servicesindustry; and the various types ofeconomic, industrial base, and capabilitydevelopment within the United States asof early 2020. Through an alignment of7these three primary dimensions andsubsequent discussions with launchservices operators, industry specialists,and former range officers, we havedeveloped a series of insights todetermine “where” and “how” to play inorder to develop a more robust andsustainable space industry presencewithin the Central Coast Region.While it should be no surprise thatCalifornia, as a long-standing criticalcomponent of the aerospace and defenseindustrial base, has competitiveadvantages across almost the entirespace industry value chain, our findingshave highlighted challenge areas andopportunities in which the State may beable to significantly transform the spaceindustry.To get to this initial future vision, westarted with the core mission of assuredaccess to space from VAFB for nationalsecurity and U.S. Government priorities(e.g. civil space exploration and earthobservation) and then mapped a futurestate that couples the requirements ofthe launch services industry withcomplimentary or linked activities acrossthe value chain which add resilience. Withconcern over the volatility and a potentialdecrease in the commercial addressablemarket for commercial launch servicesproviders in the near-term, we envisioneda future state of the base with aworkforce, activities, and regionalinfrastructure that were less prone tocommercial market supply or demandshocks. This is no small task and we knowthat this Phase 0, interim report, is simplya start towards designing a sustainableand implementable vision.At the end of our Phase 0 analysis, weremain optimistic about the future ofspace within the Central Coast Region andwe eagerly look towards a potentialvibrant future state of commercialactivities built around, and in conjunctionwith, VAFB.“If Vandenberg cansuccessfully develop therequired, and sharable,infrastructure that we needto succeed, we couldperform all ourgovernment launches outof Vandenberg.”-New Entrant Launch Company

Vandenberg AFB Commercialization Master Plan The Art of the Possible for Vandenberg AFB8

Vandenberg AFB Commercialization Master Plan Market ResearchMarket ResearchMarket research suggests an opportunity to capitalize on the growing commercialspace industry activities and attract additional commercial activity to VAFBOur ApproachOur approach is to examine theintersection of industry dimensions todetermine the “where” and “how” to playfor a desired future end-state of spacewithin the Central Coast region.The framework on this page provides asimplified visual representation for ourapproach and includes the followingcomponents:Dimension 1: The Value ChainWe commonly use a value chain toevaluate growth opportunities inemerging and growth markets. Our viewof the space value chain encapsulates thespace ecosystem across three primarysegments centered around launch as theenabling factor. Each segment requires atailored approach to navigate factors suchas regulatory environments, capitalexpenditures, barriers to entry, andpotential ROIDimension 3: Development TypeTo benchmark future end states andscenarios for VAFB, we have formulatedeconomic, industrial base, and capabilitygrowth into five categories ranging fromthe creation of a simple concrete padthrough a concerted development effortto create a true aerospace cluster.Dimension 2: Launch Systems TypesWe have categorized launch vehicles intofour categories based upon our valuechain and spaceport developmentresearch in conjunction with our industryand specialist interviews conducted todate.The following sections and associatedappendices provide details on eachdimension and the recommendationsderived from the analysis.FIGURE 1The Intersectionality of Dimensions and Industry Trends in Determining the Future End-StateTrends in ActionTraditional spaceports are m odernizingLong-standing spaceports are updating theirinfrastructure to support a more diverse profileof launch vehicles.VAFB has strong U.S. Governm ent tiesAs the home to the U.S. Space Force 30thSpace Wing, and components of the U.S. SpaceCommand and the Missile Defense Agency thebase benefits from modernization andupgrade efforts including theRange of theFuture programTrends in ActionA History of Established OperationsVAFB currently operates six active space launchcomplexes and has multiple private launch customersas customers. The base is currently adding twoadditional launch complexes to support tacticallyresponsive launch operations.9Developm entTypeAerospace ClusterSpace ClusterSpaceportLaunch RangeSpace LaunchComplexValue ChainSegm ent sManufacturingSpace OperationsSpace ApplicationsVisionfor t heFut ureTrends in ActionGrow ing venture capital fundingVC funding in space over the last four yearswas greater than the previous 20 yearscombined, with growth distributed acrossthe number of investments and the numberof VCs investing.Strong investm ent m om entumSince 2015, VCs invested over 16.5B inspace companies, including 5.8B in 2019alone. A total of 535 companies havereceived investment to-date.Launch Syst em sUltra-Heavy & CrewedMedium & Heavy LaunchOperationally & Tactically ResponsiveSmall LaunchSuborbital SpaceHigh Altitude AssetsLow er launch costsSmall spacecraft, reusable rockets, and lower manufacturingcosts have reduced launch costs by a factor of 20 over thelast decade, yet structural challenges remain.Unique AdvantageVAFB is only one of two US facilities that launches to polarorbit and the only one in the US capable of launching intohigh-mass polar and Molniya orbits.

Vandenberg AFB Commercialization Master Plan Market ResearchDimension 1: The Value ChainThe breadth of today’s space economymakes it difficult to assign prescriptivedefinitions. Space technologies – bothgoods and services – are increasinglyimportant to a range of consumers and,as such, the benefits derived by users areno longer exclusive to core spaceparticipants. For example, the activitiesassociated with sending satellites into lowearth orbit (LEO) generate significanteconomic returns, as both organizationsand individuals on Earth use the datathese satellites generate or supply (i.e.GPS data provided from space). Indeveloping a definition for the spaceeconomy and associated industry andvalue chain segments, we have drawnupon Deloitte’s global work to-date, ourDeloitte Access Economics group, and anumber of reputable international andauthoritative sources.More specifically, this report uses theOrganization of Economic Cooperationand Development (OECD) definition of thespace economy as a grounding basis anddraws on the detailed definitions instudies of other space economies to guidesub-sector classification. The internationalstudies drawn on include LondonEconomics (for the United Kingdom SpaceAgency) and Australian studies conductedby Deloitte Access Economics and ACILALLEN.This report has adopted the OECDdefinition of the space economy tocapture broader space-related activity.This definition reflects the traditionalactivities of the space industry, but alsobroader uses of space-derivedtechnologies and applications.10OECD Definition of the Space Economy“The full range of activities and the use of resources that create and providevalue and benefits to human beings in the course of exploring,understanding, managing and utilizing space. Hence, it includes all public andprivate actors involved in developing, providing and using space-relatedproducts and services, ranging from research and development, themanufacture and use of space infrastructure (ground stations, launchvehicles and satellites) to space-enabled applications (navigation equipment,satellite phones, meteorological services, etc.) and the scientific knowledgegenerated by such activities. It follows that the space economy goes wellbeyond the space sector itself, since it also comprises the increasinglypervasive and continually changing impacts (both quantitative andqualitative) of space-derived products, services and knowledge on economyand society. 1Industry Size & Context as ofTodayThe space economy boasts 414.75 billion(USD) in annual global spend2, whichencompasses a complex ecosystem ofgovernments, commercial companies,venture capital firms, accelerators,incubators, research organizations, andacademic institutions.The Future of the Global SpaceEconomyGoldman Sachs, Morgan Stanley, andBank of America have estimated that theglobal space economy is headed towardsa 1 Trillion market size between 2030and 20453. The path towards a 3x growthin industry size is underpinned byadvances in manufacturing technologies,a better understanding of market andmission gaps, and a massive influx ofventure capital that has seen over 25.6Billion of external capital invested into theindustry since 20004.Venture capital investment in the spaceindustry over the last four years wasgreater than the previous 20 yearscombined, with growth distributed acrossboth the number of investments and thenumber of venture capital firms investing.Since 2015, venture capital firms haveinvested over 16.5B in space companies,including 4.8B in 2019 alone5. 55% ofnew space ventures, or 91 start-ups, arebased out of the United States6. While theinvestment trends are promising, thereare growing concerns over the exitstrategies for venture-backed launchcompanies, as the often missed technicaland programmatic milestones create aripple effect on the launch sites andsatellite industry. Venture capitalists havenot been afraid to back out of severalpromising ventures in the launch andenabling space operations segments.There is an increased focus on publicprivate partnerships to support thewarfighting mission. To increase spacesuperiority for the warfighter,procurement times must decrease, initialoperating capacity must occur faster, andthe development of space technologiesfor the warfighter must be closer alignedto the agile and iterative practices ofother technology-heavy industries.Leading the way is the USSF Space andMissile Systems Center (SMC) and the

Vandenberg AFB Commercialization Master Plan Market Researchnewly created Space DevelopmentAgency.Currently, the value chain segmentscontinue to mature at an uneven pacedue to funding, business, or marketconditions – factors that may result innew structural barriers to commercialproviders or consumers. A renewed pushfor agile development and rapidacquisition of commercial services fromthe military space segment, coupled withincreased budgetary pressures and thelunar mandate on the civil side, shouldresult in more opportunities forcommercial space providers.Introduction to the Space ValueChainGiven the breadth and depth of the globalspace economy and the disparate natureof its activities from antennamanufacturing to ensuring thesurvivability of astronauts on-board theInternational Space Station (ISS), there isno singular view of the space value chainor a unified view of the space economymarket sectors and industry segments.From a top-down view, we can derive thevalue of specific types of activities orservices (e.g. commercial space servicesthat provide satellite television) from theaggregate global space economy figures.From a bottom-up view, we can derivethe value of commercial space andentrepreneurial activities from privateand public investments into early-stagethrough public-facing companies.Unfortunately, while these views providevaluable insight into the state of themarket, this does not help us assesscommercialization activities within theCentral Coast Region and necessitates thedevelopment of a more granularapproach to examining value creation.11To properly examine where to play withinthe global space economy and spaceindustry, we have compiled a highlycoupled value chain centered around thelaunch services industry and the primarycommercial driver of the launch servicesindustry: satellite deployment. Bycreating a value chain specific to theactivities related to the primary missionof VAFB, we can perform a top-downalignment to the global space economyand a reasonable bottom-up alignment ofthe investment themes. Our value chain ismeant to be a guiding construct for thedevelopment of the future state and isexpected to evolve over subsequentphases of this project.Our value chain is aligned around threemain activity segments (manufacturing,space operations, and space applications)that are further decomposed to capturethe operational nature of the activity (e.g.space-based, data-driven, or end-userservice driven). Each segment and itssubsegments require a tailored approachto navigate factors such as regulatoryenvironments, capital expenditures,barriers to entry, and potential ROI.Observations within the ValueChain SegmentsThe alignment of the value chainsegments and components allow us toderive ongoing industry trends relevant tothe health of the global space economy,the space industrial base, and thecustomers for each segment (e.g.demand-side). Not all the value chainsegments are directly applicable to VAFBand the vision for the future as outlined inthis report. This report identifies a broadrange of value chain activities for satellitemanufacturing, satellite space launch,space applications, and otherdownstream activities so as to provide aholistic view of the market and industryactivities. Ultimately, our vision for thefuture and recommendations arecentered around launch concepts andorbits that are serviceable or accessiblefrom VAFB. Where value chain segmentsare not applicable, fewer insights areprovided during this phase in order tofocus on more actionable andaddressable segments.To identify the most immediately viableoptions for commercial development atthe base, we have performed a currentstate assessment to gauge VAFB’s currentcapabilities across the Space Value Chain.This assessment was based on bothindustry knowledge and industryspecialist interviews with former U.S. AirForce personnel with direct VAFBexperience. In summary, VAFB has astrong history and legacy of experience inthe space industry, a moderate amount ofinfrastructure suitable for today’s market,and a core group of commercialpartners/customers. These factors willhelp demonstrate to the market thebase’s capabilities to handle demand forboth launch and other space services. Thecurrent state assessment presented in ourvalue chain analysis represent high-levelfindings to-date, and we will work withthe 30th Space Wing and other projectstakeholders to further refine the analysisin the subsequent phases of the project.“The future of space atVandenberg should betterreflect the modernoperating environment andthe current state of thespace market.”-- Space Industry Executive

FIGURE 2The Space Value Chain for Satellite Operations and ApplicationsGlobal SpaceEconomySegmentationCommercial Infrastructure & Support IndustriesCommercial Space Products & ServicesSpace OperationsValue ChainSegmentManufacturingSpace-Based Assets& TransportationNon-Space Based mentsLogisticsGlobal VCInvestment* 873M 12.3B 2.2B 199MDescriptionManufacturingof spacevehicles,satellites,ground stationequipmentinclusive of allsubcomponentsSpacelaunchproviders,rideshare& ionsofsatellitesand spacevehiclesSpace singCollectorsData Exploitation,Analysis, & DisseminationActivitiesEnd User ServicesDataAnalytics & Direct-toCollection & AI-Fueled ConsumerAggregationAnalysisServicesTelecom &ConnectivitySatellites 222M 220MGroundstations andthe necessarysystems totransfer e, orspacecraftcarryingcargo aswell asgroundbasedsensors 1.1BThecollectionandaggregationof datafrom analytics,ormachineassistedsolutionsfor theanalysisof spacederiveddata 2.8BDirect-toconsumerservices,such assatelliteTV, radio.Telecomandconnectivityservicesprovided toend-usersvia satellite*Investment time period includes VC investment from 2015-2019. Source: Deloitte Space VC Tracking Report based on Crunchbase and PitchBook

Vandenberg AFB Commercialization Master Plan Market Resea

of the full master plan in phases 1 and 2. Phase 1: Interim Master Plan Intent: Provide the draft Master Plan recommendations and infrastructure assessment to provide opportunities for stakeholder input and collaboration Phase 2: Final Master Plan Intent: Provide final report to