PN 33/22 £38m available for ground-breaking ideas to revolutionise water industry

  • Entries for the third round of Ofwat’s Water Breakthrough Challenge will open today, offering up to £38 million to incentivise innovation in the water sector.
  • The competition, run by Ofwat in partnership with Challenge Works and supported by Arup and Isle Utilities, has already recognised a number of winners from its first two rounds including innovative initiatives to prevent leaks, help vulnerable customers save on bills, and reduce greenhouse gases.
  • The competition will invite ideas that can deliver wide-scale, transformational change that benefits customers, society and the environment.

Monday 3 October– The third round of Ofwat’s innovation competition –Water Breakthrough Challenge – opens today, encouraging innovation and collaboration to transform water services with up to £38 million available in funding.

The Water Breakthrough Challenge, run by Ofwat in partnership with Challenge Works, Arup and Isle Utilities, aims to encourage initiatives that help to tackle the biggest challenges facing the water sector, such as achieving net zero, protecting natural ecosystems and reducing leakage, as well as taking opportunities to use open data and deliver value to society.

Previous rounds of the prize have already seen numerous innovative projects win funding for their potential to benefit customers, society and the environment. For example, Anglian Water’s Triple Carbon Reduction solution won more than £3.5 million in the first Water Breakthrough Challenge to use new technologies to eliminate greenhouse gas emissions, while Northumbrian Water’s National Leakage Research and Test Centre (NLRTC), won £4.3 million in the second Water Breakthrough Challenge to test new ways to combat leakage under “real life” conditions.

Another winner of the second Water Breakthrough Challenge, Support for All (also from Northumbrian Water), received over £630,000 for its plan to build a technology platform that combines data on vulnerable customers across utility providers in order to better reach and support those in need. This could make a significant difference to families facing rising utility costs in future winters.

The new round of funding, which launches today, will be available through two different streams:

  • The Catalyst stream, which closes on Thursday 8 December 2022, will make £8 million available to entrants seeking between £150,000 and £2 million.
  • The Transform stream will make £30 million available for entries seeking between £2 and 10 million, with the first stage of entries closing on Wednesday 9 November

Winners are expected to be announced in April 2023 for the Catalyst stream, and late May for the Transform stream.

As in previous rounds, entries for the Water Breakthrough Challenge must be submitted by water companies in England and Wales, but they can enter in partnership with organisations both within and outside of the water sector. This could include universities and institutes, retailers, start-ups, or small businesses in sectors such as energy, manufacturing, health, or financial services.

Further funding will be available in early 2023 through the Water Discovery Challenge, a new competition which will aim to bring in more diverse, game-changing ideas from outside the sector. Unlike the Water Breakthrough Challenge, there will be no requirement for organisations to partner or receive sponsorship from a water company to enter the competition, instead, innovators will be invited from sectors ranging from energy to agriculture, to bring their experience and expertise to creating a robust, high-tech water system for the future.

The Water Breakthrough Challenge is funded through Ofwat’s £200 million Innovation Fund, as part of the regulator’s goal to create an innovative and collaborative water sector that meets the needs of customers, society and the environment in the years to come. Further rounds of the Water Breakthrough Challenge are planned in 2023 and 2024.

John Russell, Senior Director at Ofwat said:

“This summer has shown the huge importance of water, and this competition will provide transformative changes that can help to better preserve and manage this vital resource. Two years’ worth of revolutionary ideas from Water Breakthrough Challenge winners show there are ways to tackle these growing challenges. These ground-breaking solutions now make it possible for the water industry to better anticipate weather and temperature changes, detect and prevent infrastructure problems, and – importantly – help customers reduce bills.

“With the launch of this round of the Water Breakthrough Challenge, we look forward to seeing even more exciting initiatives, harnessing the latest scientific and technological advances to address some of the most pressing issues of our time – and make a meaningful environmental and societal impact. We’re also excited for next year when we’ll launch our Water Discovery Challenge to invite ideas from any sector to tackle the toughest challenges facing water today and in the future.”

More information about Water Breakthrough Challenge can be found here:


Notes to Editor

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. Entries are 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.

The Innovation in Water Challenge, Water Breakthrough Challenge 1 and Water Breakthrough Challenge 2 (Catalyst and Transform streams), 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 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’. It will confirm its final decision in December 2022.

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 the new name of Nesta Challenges. We are a social enterprise founded by the UK’s innovation agency Nesta. For a decade, we have established ourselves as 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.

The world finds itself at a critical juncture. Together, we face multiple compounding problems, but there is enormous opportunity to discover solutions and expand innovation frontiers. The impact of climate change is felt more harshly by the year, but innovation can mitigate this impact; the growth of chronic health conditions and the widening global inequity in access to healthcare can be reversed; an ever more complex, connected and digitally driven world poses a multiplicity of societal challenges but also makes rapid, positive, life-changing technological change possible – if harnessed and directed properly.

We believe no challenge is unsolvable. Challenge Works partners with organisations, charities and governments around the globe to unearth the entrepreneurs and their innovations that can solve the greatest challenges of our time.

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.