How innovation can make water sexy

The Ofwat innovation fund has dished out £104 million to 57 projects so far, which have involved every company in the sector.

In the annual review of the fund, published by the regulator this month, Welsh Water and United Utilities were highlighted as the most active companies, each involved in 56 entries and 27 winning bids.

So far, projects that improve existing ways of working have dominated the entries, making up 39% of all projects. Innovation around operational resilience accounted for 28% of schemes; projects aimed at responding to climate change and protecting the environment accounted for 19% and 14% of the funds.

Ofwat has said the fund will be extended in the next price review period, with £300 million available from 2025-30 to continue to push for improvements across the board.

Utility Week talks to Jon Brigg, a judge on the most recent round of the Ofwat Innovation Fund, about how new attitudes towards working together can raise the profile of the work the sector is doing.

“Collaboration is a dreadful word,” Brigg says, adding that he hates it “with a passion”. However, no one can fail to see value in the discussions and sharing of data that have come about since the innovation fund was introduced as part of PR19.

“There’s a common will to share data, financial information or whatever the variable is to get to an answer soon that we never saw before.”

The regulator ring-fenced £200 million for sector spending on innovation between 2020 and 2025. For the next price review the fund will grow to £300 million – a testament to its success.

Brigg worked at  Yorkshire Water for two decades and is now independent innovation and technology advisor.

Having taken part in the first round of the funding, he says the maturity of bids have really progressed as companies have become more familiar with the fund.

“There’s never been this amount of money available to de-risk really challenging and transformational innovation. It’s new territory. In the first few rounds some ideas were not quite mature in their thinking but now there’s a greater number of projects being promoted.”

This collaboration – the dreaded C-word – has helped overcome a historic issue in the sector of looking at one problem with one solution, which meant potential for aggregated benefits were often overlooked.

“It’s the dependencies of putting a piece of technology or a service in an end-to-end process starting with land management from source to discharge. There are implications up- and down-stream from any intervention, which could have positive or negative dependencies.”

He cites the Severn Trent Net Zero Carbon Hub , which was awarded £10 million from the fund to find ways to drive down emissions from wastewater treatment. This will include capturing and utilisiing carbon dioxide, rather than sequestering it.

He says the Breakthrough Challenge is important because it gives companies an opportunity to demonstrate novel technologies or practices at scale. In a risk-averse sector like water, the progress of an idea to implementation at scale can lose momentum if it cannot be demonstrated at scale, Brigg says.

“Demonstration at scale is critical to implementation,” he says. “There is very little room for risk in deployments of a critical service, delivering potable water and treating wastewater all the time.”

Compared to the amounts companies are used to investing in projects, £200 million over five years towards innovation is not a huge sum, but it levels the playing field for smaller water companies to become involved and bring technical specialisms to the table, alongside the larger ones that may have a greater budget for innovation.

“Water company business plans are really tight, so to speculate on innovation is a difficult thing for them to do,” Brigg says. “They have to have the appropriate budget to demonstrate a technology or project at a big enough scale to warrant mass deployment.”

It also puts pressure on water companies to adopt new technologies if they have been proven at scale. “If they’re demonstrated to work then there’s really no excuse for water companies not to deploy.”

So why is this good work not talked about more widely?

Brigg says it would be inaccurate to say there was never innovation before the fund, but the incremental improvements failed to make headlines. “To the detriment of the sector they weren’t talked about,” he said. “Possibly because they aren’t sexy enough.”

But looking at things being done now, the interdependencies of different industries really starts to become transformational.

Linking water to energy and agriculture, Brigg says, is uncovering opportunities in the circular economy and to manage carbon between industries

“We’ve technologies which link water to agriculture, which link to power, which link to carbon sequestration. In agriculture, if we can sequester into soils and improve soil health to hold more water it means less nutrients are needed. This produces crops more sustainably. Then that really does start to grab the attention in that and the headlines.”

He adds the fund is enabling connectivity of ideas to deal with biogases from anaerobic digestion as part of wastewater treatment processing. Rather than gas to grid injecting, refining methane to manufacture methanol increases its value hugely.

“Growing up in a water company, I heard the phrase so many times ‘we’re here to provide water and that’s what we do’. Well, actually, we could be doing so much more than providing water or wastewater. And that is where media attention is missing.”

By March next year, 19 projects funded through the collective pot are due to complete.

Ofwat wants participants to step up how much they share and feedback to other companies about schemes, after admitting only one finished project has publicly published its findings.

Looking ahead, the regulator has said work is required to support widescale rollout after trials as well as feeding the insight from the fund into policy discussions around how regulation can better support regulation in the sector.