Scotland has - for the moment at least - lost one of its five potential spaceports and while some may not like it, this should neither come as a surprise nor be viewed as a negative development.
That said, many were caught off guard last week when Orbex announced that it is mothballing its £20 million launch facility on the A'Mhoine peninsula in Sutherland. Rockets built at the company's headquarters in Forres will instead take off from rival spaceport SaxaVord in Shetland, possibly as early as next year.
Journalists were taken on tours as recently as late August to view progress on the "floating road" over the peat bog where Sutherland Spaceport was under construction, with Orbex emphasising the steps being taken to minimise the impact on the environment. In October, Highland Council granted planning permission to shift tracking antennas to a nearby mountaintop.
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Work was still progressing in November, when project contractor Dynamic Concepts released tenders for phases three and four of construction.
But just hours before Finance Secretary Shona Robison stood up to deliver the Scottish budget on December 4, Orbex chief executive Phil Chambers announced that the company was "pausing" construction at Sutherland to boost production of its smaller Prime rocket and put more funding into development of a medium-sized launch vehicle known as Proxima. It is believed the move will allow Orbex to achieve its first launch next year.
“Orbex is first and foremost a launch services specialist," Mr Chambers said.
"Our primary goal is to support the European space industry by achieving a sustainable series of satellite launches into low Earth orbit. This is best achieved by focusing our resources and talents on developing launch vehicles and associated launch services."
Orbex took responsibility for the operational management of Sutherland Spaceport - a project originally headed up by Highlands and Islands Enterprise (HIE) - in November 2022, with construction getting underway in May 2023. The project had £14.6m of public funding commitments, including more than £9m from HIE.
Unsurprisingly, HIE is not happy with the decision by Orbex, which it described in a statement last week as an "unexpected change of direction".
"When HIE first began implementing plans for a spaceport on the A’ Mhoine peninsula, back in 2018, it was with the clear intention that this would create new economic opportunities for present and future generations," the agency said.
"We want to send a clear message to local people in north Sutherland that we are deeply disappointed at this turn of events and remain committed to working with them to develop a positive future for Melness and the surrounding area.”
It remains unclear how much Orbex will save from launching at SaxaVord, which has been on the receiving end of more than £33m of private money and has been seeking further investment. Its biggest shareholder is Danish fashion billionaire Anders Povlsen, who has openly opposed the Sutherland Spaceport development.
Questions have also been raised about the public funding Orbex has received for the project. Responding to a question on December 5, First Minister John Swinney said the Scottish Government would ensure that the money is accounted for.
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“It is a completely reasonable question about public investment that has been committed, how the state had committed to the development, and how that stands," he added. "There will be contractual arrangements that have been put in place in the provision of grant funding, and I will explore those issues [and report] on what steps can be taken to address what I recognize to be a legitimate issue.”
Such questions should be asked and answered, but whatever the outcome of that investigation may be, it won't diminish the commercial logic of focusing resources on the most viable prospects in Scotland's satellite launch sector.
Mr Chambers is less than a year into the top job at Orbex, having taken over in early January from interim chief executive Martin Coates who remains a director of the company.
Mr Chambers spent two decades in the software industry and was previously chief executive of Peakton, an HR technology business he co-founded in Copenhagen which was sold to US giant Workday in a $700m deal that closed in 2021. One of Peakton's early investors was Heartcore Capital, which is also based out of Copenhagen and is a significant shareholder in Orbex.
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Upon taking the reins at Orbex Mr Chambers publicly put his full weight behind the Sutherland project, but he and the company's other investors have no doubt had a critical look at the complex and lengthy licencing process required to get the facility up and running. With very credible rivals in countries such as Germany, France and Spain also working hard to get their microlaunchers off the ground, Orbex has obviously determined it crucial to achieve liftoff in 2025.
With much of the construction at Sutherland still outstanding and regulatory approval hundreds of pages of documentation away, the business plan was clearly at risk. SaxaVord, which secured the UK's first licence for vertical space launch in December 2023, is the obvious solution.
“We're delighted to welcome Orbex to SaxaVord," chief executive Frank Strang said last week. "Given the scale of their ambition and the evolution of their offer to include a medium-sized launch vehicle, it makes sense for Orbex to start operations from SaxaVord Spaceport, which is already licenced and in a position to support their upcoming launches.
"The UK’s space industry is developing very quickly and requires the associated economies of scale and synergies to maintain its competitiveness for launch services from Europe."
Orbex has left the door open to return to Sutherland with the facility to remain under "continuous review", and in time there may be use for this additional capacity. For the moment, however, the primary objective is to turn the UK's first space launch licence into western Europe's first successful commercial liftoff.
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