As the sector absorbs Ofwat’s final determinations for water company business plans, Lila Thompson, chief executive, British Water, asks what the big increase in AMP8 investment means for the use of data and analytics in building a resilient and future-ready water sector.
In anticipation of British Water’s annual Data Conference, which took place in Warrington on February 6, we polled our LinkedIn followers by asking, ‘What should take priority for a future-ready water sector?’ Some 53% responded with ‘smart, data-driven systems.’
Increasingly, the solutions available to water and wastewater companies go beyond infrastructure and equipment, and leveraging data and digital solutions is already delivering massive wins for those companies at the forefront. This approach should now be incorporated by default into plans to improve outcomes for water quality, leakage, and demand management, to name only a few possible applications.
One area Ofwat highlights in its final determinations for the water company asset management plans running from 2025-2030 (AMP8) is demand management, with the challenge for a per capita reduction in consumption of 8l/day.
This includes £717 million investment in leakage reduction, to halve water loss by 2050 (from 2017-18 levels), along with installation of 10 million smart meters. All companies are required to gather better data and harness innovative smart technologies to reach these stretching goals.
One panel at British Water’s data conference, chaired by Paul Westrip, open data and digitalisation lead at Ofwat, focused on accelerating water efficiency using data and asked fundamental questions around how water companies should adapt to the huge increase in data, once those extra 10 million smart meters are installed, and how to bridge the gap in leakage and consumption.
The immediate challenge lies in resource limitations, especially a skills shortage in digital and data analytics experts available to work with the sheer volume of data expected to be generated in AMP8. This creates an opportunity to use innovative data solutions not considered before and to cast the net into a much wider supply chain.
Leveraging data and automation, including integrated telemetry systems, internet of things (IoT), and artificial intelligence (AI), can significantly improve efficiency and reduce the human workload needed for project management, decision-making, and programme execution.
An external briefing report from engineering consultant and British Water member AtkinsRéalis on the final determinations, released in December 2024, advised that the step-change will provide challenges, but also identified major opportunities for water companies and the supplier community to drive efficiencies, with an even tougher incentive framework.
Julian Jacobs, regulation director, at AtkinsRéalis, and convenor of British Water’s Policy & Regulation focus group, has said, “It is the opportunity for the integration of data science that is potentially the most transformational [in AMP8]. Real-time interpretation of asset performance risk and resilience trends will enable improved investment decision-making, promote more effective engineering solutions and de-risk construction – satisfying affordability constraints whilst achieving more reliable regulatory outcomes.”
Among the 30 supply chain companies who attended the Data Conference, and more within British Water’s membership, it is clear how many talented companies are already at the cutting-edge of data management and analytical systems for leakage and demand management and much more.
As Jacobs explained, “The Government’s priority on IoT and AI relies on good and accurate data for it to work efficiently. It’s a huge area of strength for many companies who know how to get the most out of asset data to develop plans, deliver reliability-based operations, and maintenance and use data in areas from compliance monitoring to delivering net zero targets.”
Ofwat has supported £104 billion pounds of spending for AMP8 – over double the £51 billion in AMP7, making it clear to the sector that the 16 water and wastewater companies in England and Wales, together with Ofwat, mean business.
While this could be the five-year planning period when everything changes significantly, there are still hurdles to delivering the governments four strategic priorities of AMP8 which are:
- Protecting and enhancing the environment
- Delivering a resilient water sector
- Serving and protecting customers
- Using markets to deliver for customers
The largest independent review into the water sector and regulation since privatisation is also underway, led by Sir Jon Cunliffe and we await how the Government will implement the findings.
Whatever the outcomes, the decisions are expected to impact the end of AMP8 and into AMP9. According to Jacobs, this all means that some plans may or may not fully happen, leaving water companies to reprioritise or play catch-up. This uncertainty is challenging for the supply chain too and what it needs is a period of stability, where there is focus on the huge challenges and we see investment driving better performance and improving long-term resilience.
With project delivery anticipated at twice the usual scale, the call from British Water would be for water companies to continue to plan projects and timeframes, standardise terms across the sector, tender early with an outcomes-focused approach, streamline approvals, and procure as soon as possible to secure the best talent and solutions available – even for projects planned years ahead.
In addition, British Water continues to support the work of its data and analytics focus group which will be meeting next on 15 May 2025. Open to members, it has been established with a vision to share, discuss, and evolve best practice use of data analysis across the water industry and its supply chain to provide better outcomes to customers and bring efficiencies to water companies.
