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Costain partnerships win £3.5m funding for innovative solutions to problems in the water industry

Thames Water


16 May 2023

  • Innovative leak detection solution and data-sharing project to boost collaboration receive share of £40m fund
  • Ofwat’s Innovation Fund seeks to tackle the water industry’s biggest challenges

Ofwat has awarded Costain partnerships £3.5m in funding for initiatives that could change the way leaks in the water network are detected and how data is shared within the industry to improve collaboration.

The projects are two of the solutions being awarded a share of £40m in the water regulator’s latest innovation competition – the Water Breakthrough Challenge.

The first initiative, Fibre Optic Leak Detection, has been awarded £1.5m to find a leak detection solution using the fibre-optic cables already adjacent to water mains. These cables (often part of the broadband network) can be used to report tiny changes in ground stability, which in turn acts as an early indication of water leaks. This technique is cheaper and more environmentally friendly than current monitoring practices. The concept has already been successfully demonstrated in the first funding round and the additional funding is to prove the solution at scale. This project will see Costain work in partnership with Severn Trent Water, Focus Sensors, Welsh Water, Northumbrian Water, South Staffordshire Water and Hafren Dyfrdwy.

The second project, Stream, has been awarded £2m to unlock the potential of data to benefit water customers, society and the environment. Stream will put in place technology and processes to remove the barriers to sharing water company data within the industry. Costain is partnering with Pinsent Masons to provide the legal and commercial framework that will enable this improvement in collaboration.

Costain’s head of innovation investment, Aarti Gupta said, “Today’s water industry is facing huge challenges from population growth, extreme weather and ageing infrastructure. It’s vital we harness innovation to tackle these issues, thinking in creative ways to drive down costs for consumers and to improve the sustainability of solutions.”

David Black, CEO at Ofwat said: “The water sector has faced mounting pressure over systemic challenges related to the environment and society, while the climate around us continues to drastically change shape. That’s why we’re funding ground-breaking innovations with potential to help us save and reuse water and wastewater products, while supporting wider society.”

The Water Breakthrough Challenge encourages initiatives that help to tackle the biggest challenges facing the water sector, such as achieving net zero, protecting natural ecosystems and reducing leaks. It’s part of a series of competitions from Ofwat, run by Challenge Works with Arup and Isle Utilities, to drive innovation and collaboration in the sector to benefit individuals, society and the environment.



Notes to Editors

Enquiries: Jemma Savage, Headland

[email protected]

About Costain

Costain helps to improve people’s lives by creating connected, sustainable infrastructure that enables people and the planet to thrive. We shape, create, and deliver pioneering solutions that transform the performance of the infrastructure ecosystem across the UK’s energy, water, transportation, and defence & nuclear markets.

We are organised around our customers, anticipating and solving their challenges and helping to improve performance. By bringing together our unique mix of construction, consulting and digital experts we engineer and deliver sustainable, efficient, and practical solutions.


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.  


The Innovation in Water Challenge, Water Breakthrough Challenge 1, Water Breakthrough Challenge 2 and Water Breakthrough Challenge 3, and Water Discovery Challenge were delivered by challenge prize experts Challenge Works in partnership with Arup and Isle Utilities. Following the first two of these (the 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' 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 challengeworks.org 


About Arup  

Arup is global collective of designers, engineering and sustainability consultants, advisors and experts dedicated to sustainable development, and to using imagination, technology and rigour to shape a better world. 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