Ofwat announced its inaugural Water Efficiency Lab (‘WEL 1’) on 25 November. The £25 million challenge-led competition is intended to unlock and scale innovations that reduce water use across England and Wales.
The first year of the competition, offering £5 million in total funding and up to £1.5 million for individual projects, is inviting innovators to develop new technologies, data-driven tools and solutions that enable people and businesses to understand their water use and take steps to reduce it.
Demand for water is already at record levels. England faces a projected 5 billion-litre-per-day shortfall in public water supplies by 2055, driven in part by population growth, climate change and increasing demand. Reducing use is therefore critical to maintaining resilient and sustainable water infrastructure.
However, while many people and businesses want to reduce their usage, most currently lack the detailed data and insights needed to understand their consumption, identify waste and take effective action. Research shows that 94% of people underestimate the amount of water they use per day – over a fifth believe they use less than 20 litres per day, when the average usage per person is 152 litres.*
The first year of the competition will focus on closing this knowledge gap – providing water customers with actionable insights that provide more detailed information on their usage that in turn lead to behaviour change. Innovators will be invited to develop solutions that not only provide water customers with increased data and insights on their usage, but also ways to act on these insights to reduce consumption.
WEL 1 will look to fund a range of innovations, with solutions in potential areas including:
· customer-facing smart data platforms that provide real-time behavioural nudges and incentives;
· fixture-level monitoring systems that track the usage of specific appliances; and
· combined leak detection and consumption systems that provide behavioural feedback.
Entries that provide alternative approaches for properties which are unable to have a water meter fitted, are hard to meter and properties that are a low priority to be metered will also be welcome – ensuring solutions are inclusive and widely applicable, making water efficiency possible for everyone.
While the water sector continues to work to reduce leaks and invest in infrastructure, ensuring these companies support their customers to understand and act on their usage is essential. The Water Efficiency Lab has been created to drive that change – facilitating innovations and breakthroughs that water companies can embed into their services to help customers to cut their overall water use.
Chris Walters, Interim Chief Executive of Ofwat, said: “Consumers and businesses want to use water responsibly and reduce its use where possible, but right now most don’t have the information they need to understand how much they use or where they can save. The Water Efficiency Lab has been created to overcome this and turn data into positive insights and action.
“Small changes across millions of people and businesses can make a big difference – helping cut usage now, while protecting the environment, reduces the risk of shortages and creates a more resilient and sustainable water system for the future.”
The Water Efficiency Lab’s first competition is open to all UK-based innovators, and international innovators, that partner with a UK-based lead entrant, from any sector including but not limited to water companies (wholesalers and retailers), tech developers, universities, behavioural science specialists and start-ups. Entries will be assessed on their potential impact to deliver water consumption reduction, innovation, feasibility and pathway to adoption and implementation across England and Wales.
The competition will formally open to entrants at 1pm on Tuesday 25th November and remain open until 10th March 2026. Winners will be announced in June 2026, with funding awarded to the most promising projects that help accelerate adoption, behavioural change and measurable reductions in demand.
More information about the Water Efficiency Lab and the first competition, including the entry form, assessment criteria, terms and conditions and the support available to entrants will be published at launch at waterinnovation.challenges.org.
