Ofwat Innovation Fund Doubles: Accelerating change in the water sector

Ofwat, the economic water regulator for England and Wales, has announced that it will double its Innovation Fund, making £400m available over the next five years to support projects that could transform the water sector to meet and solve its many challenges.

Challenge Works, in collaboration with Arup and Isle Utilities, will continue to design and deliver the Fund, building on our progress over the past five years. To date, this has included a series of competitions aimed at unlocking the innovative solutions and broader cultural change required for the sector to meet the needs of customers, society and the environment.

Previous winners have included robots that spot cracks from inside pipes, seagrass restoration projects, citizen science initiatives, partnerships to help communities adapt to increased rainfall and new ways to process sewage sludge to destroy forever chemicals. 

Helen Campbell, Senior Director for Sector Performance, Ofwat, said:  

“There’s no question that the water sector faces many urgent challenges – reaching net zero emissions, ending the overuse of storm overflows, preventing leaks, and adapting to the impact of climate change – all while ensuring customers are properly served and enabling economic growth. Our £400m commitment to continued investment in innovation will support highly collaborative projects to develop and deploy solutions to these enormous challenges. While the first five years championed nascent technologies and new approaches to demonstrate their future potential, the next five years must see them scale and deliver a lasting and beneficial impact for customers, society and the environment”.  

Holly Jamieson, Executive Director, Challenge Works, said:

“This is an absolutely critical moment for the water sector. The continuation of the Ofwat Innovation Fund presents a real opportunity to drive lasting change in how the water sector delivers for customers, both in the solutions available, and the way it collaborates. But these are not just local challenges, and the potential benefits of innovation in water are far-reaching. The solutions we develop through the Fund have real potential to contribute to global progress in agriculture, global health, climate action and beyond.”

Professor Ana Soares from Cranfield University, a leader and partner on multiple Ofwat Innovation Fund winning projects, including Water Discovery Challenge winner, Innovative Coagulant Free Phosphorus Removal Technology, said:  

“Having participated in three Ofwat Innovation Fund challenges, I have witnessed firsthand how the programme nurtures collaborative innovation, transformative projects addressing strategic challenges, and the introduction of fresh perspectives from new innovators. The programme is inclusive, supporting every stage from the conception of new ideas to their practical implementation. It supports ambitious projects that address long-term challenges such as climate change, resource efficiency, and resilience, while embracing inclusivity, leveraging leading-edge technologies and services, and ensuring tangible benefits for customers, communities, and the environment.”

Ofwat’s plans for the next five years of the fund include:

• Continuing the Water Breakthrough Challenge to support transformational projects led by the water sector in partnership with innovators
• Delivering two more Water Discovery Challenges, seeking groundbreaking ideas to revolutionise the water sector from companies outside the industry
• Launching a new Implementation Fund to support the adoption (at scale) of successful innovations

To learn more, head to the Ofwat Innovation Fund website or read Ofwat’s main decisions about their approach to the Fund from 2025-2030 on their website.