Water sector innovation: Sharing lessons from Ofwat Innovation Fund winners
8 November 2024
Challenge Works’ mission is to solve some of the world’s greatest problems by designing and delivering challenge prizes that incentivise innovators to create breakthrough solutions.
Since 2020, we have delivered the Ofwat Innovation Fund, in partnership with Arup and Isle Utilities, on behalf of Ofwat – the economic regulator for the water sector in England and Wales.
The water sector is integral to daily life and underpins the economy and society. The sector faces many challenges that it must urgently solve, from achieving net zero emissions, to preventing leaks, ending the overuse of storm overflows, tackling pollution and adapting to the impact of climate change, all while ensuring customers are properly served.
Between 2020-2025, the Ofwat Innovation Fund is investing £200 million in highly collaborative projects which see water companies working with promising innovators from across different sectors and around the world to develop and deploy solutions to the water sector’s biggest challenges.
It is a key pillar in Ofwat’s mission to drive innovation that ensures the water sector is ready for the challenges of the future and results in better outcomes for customers and the environment.
Since 2020, the Fund has awarded more than £150 million to 93 projects to expand the water sector’s ability to innovate and meet the evolving needs of customers, society and the environment.
For the Ofwat Innovation Fund to be truly successful, it’s important that the knowledge and insights being generated (both through winning projects, and the delivery of the fund itself) are shared openly so that discoveries by a project involving a water company in one part of the country, can benefit all parts of the country.
To this end, the Ofwat Innovation Fund has created two learning reports to help disseminate knowledge and enhance collaboration across the industry.
Supporting water-efficient communities
As the water sector grapples with population growth and effects of climate change, it’s imperative to ensure that customers remain engaged with their water consumption and that their water needs are met.
One of the Fund’s learning reports, Supporting water-efficient communities, explores the lessons from eight projects that have been awarded funding by the Ofwat Innovation Fund.
The projects aim to generate greater water efficiency, bringing together partnerships across utilities, engineering firms, universities, non-governmental organisations, and the private sector.
The report provides insights into these projects’ learnings and challenges, as well as those focused on collaboration, governance and partnerships.
The report also explores how the water sector can engage with, and protect, vulnerable customers. Innovation is needed to better identify vulnerable customers and make it easier for them to access help and support when it’s needed.
This includes Water4All, led by Southern Water, with partners including Sagacity, Synectics Solutions, Equifax, Leep Utilities, Together, which used customer research and data to identify vulnerable customers and make it easier for them to access help and support when needed.
The project found that customers need increasing support to pay their water bills, with 42% of people across England and Wales reporting that their financial situation was worse compared to a year earlier.
A key learning from the project is that establishing an industry definition for vulnerable customers and using open data could help water companies serve their customers. There is also more scope for cross-sector collaboration on data sharing, such as the Cabinet Office’s vulnerability data, which is currently only used for fraud prevention.
Circularity in the water sector
The Fund’s second learning report, Circularity in water: resource recovery and circular economies in the water sector, focusses on how innovations supported by the Ofwat Innovation Fund push the boundaries of resource recovery to establish a circular economy in the water sector.
Circular approaches are crucial for the reduction of waste by encouraging the reuse and recycling of resources, transforming waste products like treated sludge and wastewater into useful resources such as energy, raw materials, nutrients, and clean water.
However, despite recent progress, more innovation is needed to secure a fully functioning circular economy in the water sector.
Projects featured in the report include HyValue, a collaboration between Dŵr Cymru Welsh Water, Costain and the University of South Wales, which looks to convert biogas from sewage into clean-burning hydrogen.
Learnings from the initiative highlighted how a full-scale plant could have multiple co-benefits, including improved air quality, public health, carbon capture, energy security and technological advancement. The project is looking for future funding opportunities so it can scale its infrastructure.
Another example is the Industrial Symbiosis project, led by United Utilities in partnership with Jacobs, International Synergies, Dŵr Cymru Welsh Water and Severn Trent Water, which looks at new ways waste or by-product materials can be used as raw materials.
Ther report emphasised that the industrial symbiosis sector is not overly crowded yet and offers Environmental, Social and Governance benefits to water companies and their supply chains.
However, for a circular economy within the water sector to reach its full potential, it’s vital to evaluate progress and share challenges and learnings, exploring how to best adopt solutions that have demonstrated their value.
