The Water Discovery Challenge is returning with £7.5 million in funding to accelerate the development and adoption of innovative solutions for the water sector in England and Wales. Managed by Ofwat’s Water Innovation Fund, the competition is designed to attract ideas from outside the water industry, encouraging fresh thinking from sectors such as energy, transport, agriculture, AI, and digital technologies. Innovators will have the opportunity to break into the water sector and develop solutions addressing major challenges like net zero emissions, leakage reduction, pollution control, nature restoration, and climate adaptation.
The entry period for the second Water Discovery Challenge opens on 20 January 2026 and closes on 8 April 2026. Twenty successful entrants will progress to a finalists’ stage in June 2026, receiving up to £100,000 in seed funding, sector mentorship, and non-financial support to refine their solutions. From these, ten winning teams will later be awarded up to £550,000 in April 2027, along with an additional five-month package of support to maximize the chances of their innovations successfully launching in the water industry.
The first Water Discovery Challenge in 2023 demonstrated the potential of such initiatives. Winners like Waterwhelm developed a breakthrough water reuse and desalination technology using waste heat from wastewater treatment and industrial sites, which has since been scaled up in projects like Northumbrian Water’s Net Water PostiHyve project. Another finalist, The Fish Friendly Hydropower Company, created the PicoStream Turbine, a lightweight, recyclable turbine generating green energy from water outflows at treatment plants. Both projects benefited from funding, mentorship, and industry partnerships facilitated by the Challenge, helping them establish a presence in the water sector.
The challenge is run by Challenge Works, part of Nesta, in partnership with Arup and Isle Utilities. It aligns with Ofwat’s wider Water Innovation Fund, which has invested £600 million over ten years to tackle the water sector’s largest challenges. The Fund supports bold, scalable solutions, promotes collaboration within and beyond the sector, and has already awarded £190 million since 2020 to 109 projects. Complementary initiatives like StreamLine provide informal regulatory advice, while Spring’s Brokerage Service helps innovators connect with water companies to implement solutions aligned with industry priorities.
By combining funding, technical support, and networking opportunities, the Water Discovery Challenge aims to transform the water sector, improve service for customers and communities, and address environmental and economic challenges. It represents a key platform for innovators to bring new technologies and approaches into a sector critical to sustainability and resilience.
