PN 16/22 Innovations to improve water efficiency, stop leaks and increase carbon capture win big in Ofwat’s Water Breakthrough Challenge


0001, Thursday 28 April 2022 (London) – Innovative projects that reduce leakage, improve household water efficiency and turn carbon dioxide into useful products like paint and fertiliser, have been named winners of the second Water Breakthrough Challenge, Transform Stream.

Ofwat, the water regulator for England and Wales, has awarded £20m of funding to the winners of the second Water Breakthrough Challenge – part of a series of innovation competitions made possible by its £200m Water Innovation Fund and delivered by Nesta Challenges, Arup and Isle Utilities. The fund helps stimulate new innovations, enabling the water sector to better meet the evolving needs of customers, society and the environment.

The winners of the Transform Stream of the Water Breakthrough Challenge – focused on large-scale, long-term, game-changing innovations – include:

  • National Leakage Research and Test Centre (NLRTC) – Northumbrian Water will create a national centre to test new products to combat leakage under “real life” conditions, improving safety and effectiveness so that they can be rolled out faster and at a larger scale.
  • Managing Background Leakage – a group of water companies led by Dŵr Cymru Welsh Water will help develop new technologies to detect the many leaks that are currently missed by existing investigative methods through forensic investigations of 25 areas, deploying flow, pressure and temperature sensors at an intensity never previously undertaken.
  • Enabling Water Smart Communities – a group of water companies, universities, home builders and local authorities will work together to ensure that the 4 million new homes[1] planned by 2041 can be integrated into the water system in a sustainable way, ensuring new communities have continued access to finite water resources, wastewater is managed, and flood risks are mitigated.
  • CECCU (CHP Exhaust Carbon Capture and Utilisation) – a project to turn captured carbon into useful products like paint and fertiliser, saving 5 million tonnes of CO2 per year and making the Combined Heat and Power (CHP) process – where heat as a byproduct of energy generated is captured and used – carbon neutral.

John Russell, Senior Director, Strategy, Finance and Infrastructure at Ofwat said:

“It’s crucial for the water sector to come up with new, innovative ideas to fix the challenges that the sector – and society – faces. The winners revealed today will help develop ideas to save more water, turn captured carbon into useful products, and – ultimately – make the sector more sustainable.

“Ofwat’s Innovation Fund, which provides the prize money for these competitions, exists to help stimulate  new and bold initiatives by water companies working in partnership with universities, charities, engineering practices and technology firms. We have much to learn from other sectors and the winners of this round of the competition showcase just how much can be achieved when we collaborate.”

Sharon Darcy, Director, Sustainability First and Chair of the judging panel for the Transform Stream of the second Water Breakthrough Challenge said:

“Though many will think of net zero as an issue for power companies, the water sector consumes 2-3% of electricity generated in the UK. Novel solutions that bear down on greenhouse gas emissions like CECCU and mainstreaming approaches like Enabling Smart Water Communities that help to manage and reduce demand for water can go a long way to helping the sector reach its net zero targets for the good of everyone.”

To find out more about the winners of the Water Breakthrough Challenge and Ofwat’s innovation fund, visit

Ofwat recently opened a consultation into the future direction of the Water Breakthrough Challenges and the Water Innovation Fund. There are two ways to have a say, through the online response form or by emailing comments to [email protected]. The six-week consultation closes on 17 May 2022 – full details about the consultation can be viewed at


Notes to editors

For all media enquiries contact: Robyn Margetts, [email protected] OR Andrew McKay, [email protected]


About the winners of the second Water Breakthrough Challenge, Transform Stream


The water sector has a long history of renewable energy generation, significantly reducing reliance on grid-imported electricity, benefitting the environment, and keeping customer bills low. To extract the renewable energy, biogas is combusted in Combined Heat and Power engines (CHP), and this releases unavoidable CO2 emissions.  Severn Trent Water (STW) working with Clarke Energy and Carbon Capture Machine, will develop a new technology to reduce and reuse CO2 emissions from CHPs.  By demonstrating this first-of-its-kind technology on an industrial scale at a STW site in Derby, carbon will be removed and converted into useful eco-friendly products such as paint and fertiliser.  As well as the technology itself and its potential to unlock future innovation across the industry, the project engages with the supply chain and will be a pioneering example of the circular economy in action. Independent support and expertise from Brunel University will lend external validation and monitor the benefits of the project for the wider society.

Enabling Water Smart Communities

There remain significant challenges to customers, communities and the environment from frequent flood events, sustained droughts and impacts on water quality. Housing development in its current form and rapid growth will further augment these challenges, increasing demand on water and wastewater services to an unsustainable position. Integrated Water Management (IWM) provides a solution by combining infrastructure, technologies, policies, and behaviour change initiatives to improve lives through co-ordinated water management. IWM is rarely delivered due to ongoing stewardship issues, static regulatory and policy standards and lack of affordability.

This project will take an innovative approach to tackling these by:

  • Rethinking assets: Develop and test innovative IWM design and asset management to support new stewardship models;
  • Rethinking roles: Challenge regulatory and policy standards to support stakeholders;
  • Rethinking value: Understand stakeholder motivations to develop financial models to unlock new sources of investment, and realign existing sources, to deliver affordable IWM.

Managing Background Leakage

Water companies in England and Wales have Ofwat targets to reduce leakage by 15% in the current planning period to March 2025. Customers and regulators seek a downward trend in leakage which is seen as wasted water; but more importantly wasted power and chemicals for treatment and distribution, adding C02 emissions, impacting the challenge of achieving net-zero carbon, and adding to environmental water abstractions impacting ecology. The problem is c.50% of leakage is due to Background Leakage; defined as the sum of small leaks below a detectable threshold; generally accepted that it can’t be reduced. However, we believe some Background Leakage comes from old long-running leaks, not detected by current methods. This project aims to redefine the detectable limit of leakage to help pinpoint and repair hidden leaks and other factors contributing to background leakage. This benefits customers by creating more sustainable ways of reducing leakage, avoiding increased environmental water abstractions if future leakage targets can’t be met by current means.

National Leakage Research Test Centre (NLRTC)

Water leakage is a serious environmental problem and it must be drastically reduced to protect water security. There are plenty of ideas to tackle leakage but development of solutions needs to be accelerated.  The National Leakage Research and Test Centre will be a 5km buried water pipe network specifically for developing and testing inventions without disrupting customers’ supplies or affecting water quality.  It allows things like repair robots and sealants to be inserted into the water supply to see how they perform.  The centre’s staff will issue certifications to show water companies how well each innovation performs.  The network will include new and old pipes in a variety of materials and diameters just like a live water network but it will allow researchers to insert and move deliberately leaky section of pipes.  It will collect and recycle leaked water and will even simulate customers drawing water whilst tests are taking place. There is also scope for the centre to be used for training and other research.

Hyvalue – Hydrogen from Biogas

HyValue aims to convert sewage-derived biogas into hydrogen, to increase the decarbonisation potential of biogas by up to 10 times, whilst maximising the CO2 capture at source and minimising emissions (methane, NOx, particulates, etc.).

As a collaboration between Welsh Water, Costain and the University of South Wales, the project will initially study hydrogen production as an alternative use for the biogas, by comparing its sustainability to the other mainstream uses of biogas and incorporating the impact of Carbon-Capture-Utilisation-Storage (CCUS).

The project team’s hypothesis is that producing hydrogen from biogas provides the highest potential environmental and decarbonisation benefits, whilst providing the best value for money for customers.

If the study proves the merits of producing hydrogen from biogas, the partners aim to produce an outline design of a plant at one of Welsh Water’s anaerobic digestion facilities, with the aim to assess the technical feasibility of building a plant in AMP8.


Most people know that turning on the tap activates a complex process where water flows along networks of pipes into our homes and businesses.

Most people aren’t aware, however, of the critical role data plays in enabling this. From identifying customers who need support to finding leaks, data is the lifeblood enabling the water sector to deliver benefits to our customers, society, and the environment.

Between now and 2024, Stream will design and deliver the ‘network of data pipes’ needed to share useful industry datasets in a secure, standardised and easy to access way. This will allow our data to flow into larger datasets, enabling us to collaboratively solve tough sector challenges. But Stream’s impact reaches beyond the water sector. Experience from other sectors, like banking and transport, shows that publishing data publicly builds trust and arms innovators with the information needed to launch new services which further benefit society.


Water4All aims to proactively identify and engage customers in financial vulnerability to offer them support by increasing access to social tariffs and assistance programmes provided by Water Companies and their partners.

Many water companies have specific initiatives aimed at supporting customers, but they urgently need help to better identify and support low-income and financially vulnerable households. Water4All, led by Southern Water, puts financially vulnerable customers at the heart of the solution.

Sagacity as delivery lead of a consortium of multi-sector experts that includes Equifax and Synectics Solutions, Advizzo, Auriga, AgilityEco and Waterwise will use their industry knowledge and data to seek and serve customers who need help most. Through proactive identification and engagement, Water4All will help financially vulnerable households to maximise their income, reduce their bills and lower their carbon footprint.

About Ofwat’s Innovation Fund and the Water Breakthrough Challenge

Ofwat is the economic regulator of the water sector in England and Wales. It 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 second Water Breakthrough Challenge is run by Ofwat and Nesta Challenges in partnership with Arup and Isle Utilities and is the third in a series of competitions delivered through the Fund following the Innovation in Water Challenge and first Water Breakthrough Challenge last year. More information about Nesta Challenges, Arup and Isle Utilities:

All current and previous winners can be viewed here:

About Nesta Challenges

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.

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