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State aid: Commission approves £21 million aid to UK spacecraft manufacturer SSTL for development of low-cost radar satellite
The European Commission has found that UK plans to grant £21 million (around €24 million) support to Surrey Satellite Technology Limited (SSTL) for the research and development (R&D) project NovaSAR are in line with EU State aid rules. The project aims to develop, launch and demonstrate a low-cost, medium-resolution, space-based Synthetic Aperture Radar (SAR) satellite including service demonstration and applications development. The aid addresses a genuine market failure without giving rise to undue distortions of competition.
Part of the project will be carried out in collaboration with a research organisation, the Satellite Applications Catapult (SAC). The UK Government will obtain 15 % of the imagery data for free with the aim of demonstrating effective data service delivery, experimentation and developing third party applications via the SAC. In case of success, three additional, privately funded, satellites may be developed.
Spacecraft manufacturer SSTL, an EADS Astrium subsidiary, will receive a grant of £21 million (around €24 million) for carrying out the research and development activities that are necessary to realise the project.
The Commission examined the compatibility of the aid in relation to the Framework for state aid for research and development and innovation (R&D&I framework, see IP/06/1600 and MEMO/06/441).
After scrutiny, the Commission concluded that the 'NovaSAR' project suffered from market failures. The aid is both necessary and sufficient to encourage SSTL to carry out an R&D project which it would not have launched spontaneously, given the risks involved. Finally, the Commission concluded that the distortions of competition triggered by the aid would be very limited, in particular in view of the limited market shares held by SSTL (including its owner and subsidiaries) on the relevant market, as well as the expected growth of these markets.
Background
In June 2013, the UK notified plans to support the development, launch and demonstration of the NovaSAR satellite, which will use a medium resolution (S-band). Aiming to deliver a low-cost radar satellite, the project will rely on the use of a combination of the latest commercial off-the-shelf technologies and SSTL's approach in delivering small satellite missions.
The project will be carried out in collaboration with a research organisation. The R&D activities to be carried out within the project consist of industrial research and experimental development. The foreseen duration of the project is 7 years. The public aid amounts to £21 million (around €24 million), which will be provided exclusively to SSTL for its R&D costs of £57 million (around €65 million) to be incurred by this project.
The non-confidential version of today's decision will be made available under case number SA.35753 in theState Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the Internet and in the Official Journal are listed in the ‘State aid Weekly e-News’.
