Ofwat’s Innovation Fund seeks bold and ambitious entries to Water Breakthrough Challenge 4

  • Ofwat’s Innovation Fund will award up to £40m to bold and innovative cross-sector collaborations that are solving challenges facing the water sector.
  • The regulator is seeking even more ambitious solutions that tackle climate change, pollution, and leakage, as well as those that enhance the natural environment, improve services for consumers and increase the resilience of infrastructure.
  • Water Breakthrough Challenge 4 will favour highly collaborative entries with the greatest focus on generating and sharing knowledge, and rolling out successful innovations.
  • Partnerships must be led by an English or Welsh water company.

5 September 2023 (London) – Ofwat, the economic regulator for the water sector in England and Wales, is calling on water companies with bold and innovative projects to solve some of the water sector’s biggest challenges to apply to win the fourth Water Breakthrough Challenge.

To date, Ofwat’s £200 million Innovation Fund has awarded more than £105 million to projects across England and Wales that are pioneering solutions to improve the water sector’s environmental impact – from the transition to net zero to tackling leaks and spills – and to transform services for consumers.

Since 2020, the Water Breakthrough Challenges have seen water companies form new cross-sector collaborations with gas and electric utility providers, universities, charities, SMEs, tech giants, local governments and community organisations.

Previous winners have included robots that patrol water and wastewater pipes to pinpoint cracks, carbon capture technology to convert CO2 into household products, seagrass meadow restoration off the Welsh coast, and projects to power city buses with gas extracted from sewage.

Ofwat will reward up to £40m to even more daring and forward-thinking partnerships led by water companies in Water Breakthrough Challenge 4. It is encouraging entrants to think bigger than ever before and will favour entrants with the greatest focus on generating and sharing knowledge across and beyond the water sector, and those rolling out successful innovations.

Marc Hannis, Innovation Fund Manager, Ofwat said:

“There are many challenges that the water sector needs to overcome in the next decade. They include the widely reported issues like leakage rates and sewage discharge into rivers. They also include less well-known challenges, like transitioning an industry that uses 3% of the country’s electricity to net zero while contending with the impacts of climate change and ensuring better quality services for customers.

“While it is our job as a regulator to hold water companies to account when they do not meet their obligations, we also want to incentivise water companies to accelerate innovative ideas that drive positive changes for the environment and consumers. Water Breakthrough Challenge 4 is calling for even bolder initiatives and will reward collaborations that generate and share knowledge, and roll out successful innovations.”

Water Breakthrough Challenge 4 has two entry streams:

  • Approximately £10 million is available through the Catalyst Stream for individual entries bidding for between £150,000 and £2 million. The closing date for Catalyst Stream entries is 3 January 2024.
  • Approximately £30 million is available through the two-stage Transform Stream for individual entries bidding for between £2 million and £10 million – although Ofwat is open to accepting entries bidding for more than £10 million, subject to certain conditions. The closing date for stage one is 19 October 2023, with stage two closing on 10 January 2024.

Partnerships must be led by water companies in England or Wales, including NAVs. Applicants must commit to contributing an additional 10% of the project value submitted in their bid.

Entries should respond to one of more of the fund’s innovation themes:

  • Responding and adapting to climate change including achieving the sector ambitions of net zero carbon, zero waste and zero leakage.
  • Protecting and enhancing the environment and natural systems, to protect current and future customers from the impacts of extreme weather and pollution.
  • Delivering long-term operational resilience and understanding infrastructure risks to customers and the environment, finding solutions to mitigate these in sustainable and efficient ways.
  • Testing new ways of conducting core activities to deliver the services customers and society need, expect and value both now and in the future.

Water Breakthrough Challenge 4 is designed and delivered with open innovation competition experts Challenge Works, and sustainable design, engineering and technology experts Arup and Isle Utilities.

Water companies who would like the fund’s delivery team to help brief their staff or supply chain about the opportunities presented by Water Breakthrough Challenge 4 can email [email protected].

For more information about the Water Breakthrough Challenge, including details of previous winners and how to enter, visit waterinnovation.challenges.org



Notes to Editors

For all media enquiries, please contact Alice Jaffe [email protected] or Andrew McKay [email protected]


About Ofwat’s Innovation Fund 

Ofwat has established a £200 million Innovation Fund to grow the water sector’s capacity to innovate, enabling it to better meet the evolving needs of customers, society and the environment. It is encouraging new ways of working that go beyond business-as-usual innovation practices in the water industry, in particular, increasing and improving collaboration and building partnerships from within and outside the water sector.

The Innovation in Water Challenge, Water Breakthrough Challenge 1, Water Breakthrough Challenge 2, Water Breakthrough Challenge 3, and Water Discovery Challenge were delivered by challenge prize experts Challenge Works in partnership with Arup and Isle Utilities. Following the first three of these (the pilot competitions), Ofwat received 40 submissions in response to its consultation about the future direction of the Fund. In July 2022 Ofwat set out its headline decisions on the approach we will take for the Innovation Fund for 2022-25. Alongside opening Water Breakthrough Challenge 3, Ofwat has published ‘Innovation fund – approach for 2022-25 companion decision document’, which sets out further information on the headline decisions.

Ofwat consulted on its proposal to extend the Innovation Fund beyond 2025 in ‘Creating tomorrow, together: consulting on our methodology for PR24’ and will now consider extending the Fund. Details will be decided later in 2023.

The Innovation Fund forms part of Ofwat’s approach to innovation in the water sector. Ofwat with the Environment Agency and Drinking Water Inspectorate also runs StreamLine, a joint service for innovators and businesses to get informal regulatory advice.

To contact Ofwat’s press office, please call 07458 126271


About Challenge Works

Challenge Works is a global leader in the design and delivery of high-impact challenge prizes that incentivise cutting-edge innovation for social good. In the last 10 years, we have run more than 80 prizes, distributed £84 million in funding and engaged with 12,000 innovators.

Challenge prizes champion open innovation through competition. We specify a problem that needs solving, but not what the solution should be. We offer large cash incentives to encourage diverse innovators to apply their ingenuity to solving the problem. The most promising solutions are rewarded with seed funding and expert capacity building support, so that they can prove their impact and effectiveness. The first or best innovation to solve the problem wins. This approach levels the playing field for unknown and previously untested innovators so that the best ideas, no matter their origin, are brought to bear on the most difficult of global challenges. Visit us at challengeworks.org


About Arup

Dedicated to sustainable development, Arup is a collective of designers, consultants and experts working globally. Founded to be humane and excellent, we collaborate with our clients and partners using imagination, technology, and rigour to shape a better world. https://www.arup.com/Together we help our clients solve their most complex challenges – turning exciting ideas into tangible reality as we strive to find a better way and shape a better world. With a community of over 1700 water professionals, Arup is leading global thinking across key areas like innovation, resilience, net zero carbon and sustainable water management.  Find out more: www.arup.com


About Isle Utilities

Isle is a global team of independent scientists, engineers, business and regulatory experts with a common drive to make a positive environmental, social and economic impact through the advancement of innovative technologies, solutions and practices.  Our passion and expertise in technology and innovation enables us to connect expertise, investment and inspired ideas across the globe. At the core of all our activities is our ambition to make the world a better place. Find out more: www.isleutilities.com http://www.isleutilities.com/