PN 14/22 Ofwat calling on Space, Fintech and Digital sectors to have their say in new Innovation Fund consultation


7 April 2022 (London, UK) – Following a year-long pilot that has seen more than £43m awarded to cutting-edge innovation in the water sector, Ofwat – the water regulator for England and Wales – is launching a consultation to seek views about how to continue this momentum.

The £200m Water Innovation Fund – designed to drive long-lasting change and innovation in the sector – has already generated multi-sector partnerships in response to a series of competitions – including the Innovation in Water Challenge and two Water Breakthrough Challenges. These competitions were run by Nesta Challenges – in partnership with Arup and Isle Utilities – and have generated innovative solutions from water companies and their partners to the challenges of net zero, environmental impact and improving consumer services.

Winners have included projects to generate green hydrogen from wastewater, partnerships to provide data on water quality to communities in an open and accessible way and novel engineering solutions to prevent pipes bursting, using everything from robots to ‘designer liners’ that can be retrofitted on the inside of water mains.

Ofwat is now proposing to run a third Water Breakthrough Challenge in Autumn 2022. It also proposes to run a fourth in 2023 and a fifth in either 2024 or 2025 with the potential to run competitions beyond 2025.

To maximise the impact of the more than £120 million available, Ofwat is calling for views from a diverse range of sectors that it believes can bring new insights to some of the water sector’s biggest challenges. In particular it is keen to hear from individuals, companies and representative bodies across academia, the construction sector, the UK’s space sector, the chemical and pharmaceuticals industry, the digital sector, agriculture and fisheries, the energy sector, marine sector, manufacturing and logistics, and the retail banking and fintech sectors.

Going forward, Ofwat wants to consider changes that will enable the fund to support more early-stage ideas in order to allow innovators to have greater access to the fund. The main proposed changes are to:

  • Open a new annual £4 million competition for early-stage ideas from innovators either in or outside water. It will focus on enabling and supporting earlier stage idea development. This new competition will target primarily innovators and not require a partnership with a water company to enter.
  • Maintain the annual flagship competition, with adjustments to some entry rules to encourage wider participation. It would maintain the Water Breakthrough Challenge with Catalyst and Transform streams for each competition during 2022-25. For Catalyst (entries between £250k and £1million) it would make about £6m available annually, not require a partnership with a water company to enter and allow background IP to be licensed. For Transform (entries between £1m-£10m) it would make about £30 million available annually and allow background IP to be licensed.

Ofwat is interested in the views of people and companies inside and outside the water sector on its main changes and a number of other areas it is exploring through its consultation. You can read the easy-read version of these proposals on Ofwat’s website. There are two ways to have a say, through the online response form or by emailing comments to [email protected].

Respondents do not have to have to read the full consultation to respond – however it can be accessed at The six-week consultation closes on 17 May 2022.


Notes to editors

For all media enquiries contact: Robyn Margetts, [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.

Entries were encouraged from water companies in England and Wales, alongside partnerships with universities and institutes, retailers, start-ups, technology companies, charities, and small businesses in sectors such as energy, manufacturing, health, or financial services.

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

About Nesta and Nesta Challenges

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills, and funding in areas where there are big challenges facing society. We’ve spent over 20 years working out the best ways to make change happen through research and experimenting, and we’ve applied that to our work in innovation policy, health, education, government innovation and the creative economy and arts.

Within Nesta, Nesta Challenges exists to design and run challenge prizes that help solve pressing problems that lack solutions. We shine a spotlight where it matters and incentivise people to solve these issues. We are independent supporters of change to help communities thrive and inspire the best placed, most diverse groups of people around the world to act.

We support the boldest and bravest ideas to become real and seed long term change to advance society and build a better future for everyone. We are part of the innovation foundation, Nesta. We are challengers. We are innovators. We are game changers.

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