PN 01/23 Ofwat’s Innovation Fund launches £4m open competition to reward outside innovators with bold solutions for the water sector

  • Ofwat today launches the Water Discovery Challenge, a new £4m competition for innovators outside of the water sector with bold ideas that can help solve some of its biggest challenges.
  • Water companies provide drinking water and sewage services to over 50 million households in England and Wales, with a sewage network that could wrap around the world 13 times – yet the sector faces significant challenges due to increasing demand and climate change.   
  • The Water Discovery Challenge, the latest competition from Ofwat’s £200 million Innovation Fund, will fund innovation from sectors meeting similar challenges including energy, construction, cities and transport, agriculture, and data.

Under embargo 0001 GMT, Wednesday 25 January 2023: Today, England and Wales’ water regulator Ofwat launches the Water Discovery Challenge, a £4m open-access competition for innovators with bold and ingenious ideas that can solve the biggest challenges facing the water sector today and in the future.

The competition is the latest from Ofwat’s £200 million Innovation Fund, which seeks to generate new ideas to tackle issues including managing leaks, preventing pollution, improving water efficiency, reducing emissions, boosting flood and drought resilience, prioritising sustainable practices, and supporting vulnerable customers.

Where previous Ofwat Innovation Fund competitions have focused innovations from, and led by, those within the sector, the new Water Discovery Challenge is incentivising ideas from, and led by, those outside of the water sector. It is seeking solutions from industries dealing with similar challenges to those faced by the water sector, or implementing solutions that could benefit water and wastewater services in England and Wales – with no requirement for entrants to partner with a water company. The goal is to open the sector to new ground-breaking insights and thinking that benefit consumers and the environment.

Up to 20 teams of the most promising innovators will be awarded up to £50,000 to develop their ideas, with expert support and mentoring from water companies. Up to 10 will go on to win up to £450,000 to turn ideas into pilots.

David Black, Chief Executive of Ofwat said:

“It’s no secret that the water sector has faced challenges in the last year. As a regulator we’re constantly pushing the sector to overcome these. Water affects everyone, and it’s time we see what the water sector can learn from astronauts, farmers, data specialists, architects and planners. This is about preparing the water sector for the future, and I look forward to the ideas that come out of it.”

John Russell, Senior Director at Ofwat, said:

“Our £200m Innovation Fund has already supported projects that detect and fix leaks, capture carbon emissions from water processing plants to convert them into fuel, and remove fertilisers from waterways to be re-used in our food system. Now, we’re broadening the opportunity to innovators in any industry that can make a difference to improving the water system for all of us.”

Ofwat is looking for bold and innovative entrants from outside the water sector. It has identified five sectors where it believes there is particularly high potential for innovative crossovers: energy, cities and transport, construction, agriculture and farming, and digital, data and internet of things.

To deliver the competition, Ofwat is working with innovation prize experts Challenge Works, alongside global engineering, sustainability and water sector experts Arup, and Isle Utilities. In addition to financial incentives, successful teams will benefit from expert mentoring and capacity-building support, including access to insights and mentoring from water companies and support for scaling solutions for the extensive water network in England and Wales.

Holly Jamieson, Director at Challenge Works, said:

“Our experience of nurturing and rewarding innovators across multiple challenge prizes has shown us that it is often the least likely suspects that can provide the solution with the greatest impact. And with the support of Arup and Isle Utilities, we can work closely with innovators from outside the water sector to turn great ideas into real-world solutions.”

Previous examples of Ofwat Innovation Fund winners that showcase the value of cross-sector collaboration include:

  • Pipebots – Small robots that can patrol pipes from the inside and use artificial intelligence to monitor for faults and damage to improve repair rates and prevent leaks.
  • The Organics Ammonia Recovery project – to recover ammonia in wastewater and turn it into green hydrogen fuel – a first for the industry.
  • SuPR Loofah – Removing phosphorous from wastewater using an innovative loofah to capture the chemical that can produce damaging algal-blooms in water ways.
  • Support for All seeks to put in place a shared register of financially vulnerable customers, working with the NHS, third sector, and other utility providers, to enable customers to contact one utility or service provide to receive support from all.
  • Enabling Water Smart Communities Designing new housing and urban environments to absorb excess water like a sponge during heavy rain events and cope with sustained drought by recycling “greywater”.
  • Stream brings together 15 companies to share data between them – allowing everyone better insights into leaks, customer needs and accountability. The open data system – which will be based on a blueprint being developed – will make it easier to solve complex industry challenges.

The Water Discovery Challenge is open to entries from today at 1200 (GMT) and closes on 5 April 2023. To find out more about the competition and enter, visit


Notes to Editors:

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

3. Water Discovery Challenge key info

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.

Entries are encouraged from expert innovators from any sectors in England and Wales, including those working in industries such as: energy, cities and transport, construction, agriculture and farming, and digital, data and internet of things. Previous competitions have also seen entries from water companies in partnership with universities and institutes, retailers, start-ups, technology companies, charities, and small businesses in sectors such as energy, manufacturing, health, or financial services.

The Innovation in Water Challenge, Water Breakthrough Challenge 1, Water Breakthrough Challenge 2 and Water Breakthrough Challenge 3, were delivered by challenge prize experts Challenge Works  in partnership with Arup and Isle Utilities. Following these 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 will 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

About Arup

Arup is an independent firm of designers, planners, engineers, consultants and technical specialists, working across every aspect of today’s built environment. 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.

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.