MAIN FEATURE
Nature-based solutions are key to protecting our waterways. As water companies explore new approaches, balancing innovation with environmental outcomes is crucial for a sustainable future.
Hickey highlighted the need to harness the creativity of the supply chain and bring in experience from other sectors to get the most from AMP8 investment for wider environmental benefit. He also noted how engineered solutions can, and should, work alongside NbS rather than being seen in opposition.
Innovative collaboration
Ofwat, the financial regulator for the water sector, is now digging deep to find innovative and collaborative solutions by augmenting its Innovation Fund.
Speaking on the WiseOnWater podcast, Marc Hannis, innovation fund manager at Ofwat said, “The Ofwat Innovation Fund was born out of PR19/AMP7 from 2020- 2025. It has been confirmed that it is going to double in size from £200 million to £400 million in AMP8.
“It is all about bringing forward innovations to tackle the big problems the sector is facing [including] climate [change], pollution, and water scarcity and supporting solutions in these areas.”
The main characteristics of the Innovation Fund is that applications must be collaborative between multiple cross- sector partners, with the purpose of drawing in new perspectives and fresh ideas. This will enable new ways of working to come to the fore, helping
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uncover ways for innovative solutions to be further enabled and accelerated.
On collaboration, Hannis said, “This is the greatest success we've seen so far. The Ofwat Innovation Fund has been described as unprecedented collaboration across the sector, particularly between water companies.
“We've had instances in previous rounds where we've seen over 10 water companies come together on a project of common interest. This sort of collaboration was not happening prior to the Fund, innovation was very siloed, so it's great to see.”
Water companies
As for the water companies who are regulated, six have decided to refer its Ofwat final determinations for AMP8 to the CMA: Anglian Water, Northumbrian Water, Thames Water, Southern Water, South East Water and Wessex Water.
Combined, they serve more than half of all households in England and the appeals follow Ofwat’s decision to cut the six companies’ planned investment by nearly £7 billion. Once Ofwat formally makes the referrals, the CMA will have six months to make its own determinations, with the possibility to extend for ‘special reasons’.
Six water companies going to CMA referral is unprecedented, and they argue
| April 2025 |
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that Ofwat is prioritising keeping customer bills low over allowing necessary investment in infrastructure improvement, environmental protection, and long-term resilience. Nevertheless, many water companies are vocal about the ambition of their plans and how AMP8 marks a step-change for investment and operations.
Customer engagement
Richard Price, managing director of wastewater for Pennon Group, which includes South West Water, says the utility engaged 30,000 customers to ensure its business plan reflected actual rather than perceived need. He said, “By engaging over 30,000 customers in setting our business plan the business has been reorganised to be laser focused on driving delivery.
“For me that starts with being clear on the accountabilities, from me as the managing director [and] right through my organisation. What is then key is how we deliver that plan.”
This led to four strategic priorities and a reorganisation of the company to align with those priorities, including eradicating combined sewage overflows (CSOs) and pollution incidents, water quality and resilience, net zero and environmental gains, and customer affordability.
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