AMP7: From sustainable to frontier – the change in leakage economics

In July 2017, with one small paragraph of text in a 282-page PR19 methodology consultation document, Ofwat changed the economics of leakage in England and Wales forever. Their leakage reduction challenge meant a change in mind set, from attaining an economic leakage target to economically achieving a stretch target.

On December 16 2019, Ofwat published its final determinations - high on their priority list is minimising supply interruptions by reducing leakage by 16% and mains bursts by 12% across our UK water networks to improve customer service and affordability.

So how do you achieve these aims without a silver bullet? Doing more of the same won’t get you there with limitations on budget and resources, but you don’t need to reinvent the wheel. Building on the firm footing of one of the most respected leakage sectors in the world it is important to innovate and utilise data and technologies in new ways, making incremental improvements at multiple touch-points.

RPS have developed a new economic model based on the ‘life of a leak’ which we break down into four parts – Prevent, Predict, Detect, and Repair. Frontier Leakage Optimisation (FLO) takes a company target and disaggregates it to optimise dynamic localised targets and approaches for least cost delivery.

The most efficient way to reduce leakage is to Prevent it from occurring in the first place. The ability to Predict where leakage might happen ensures we can target resources efficiently. Using the right technique to Detect leaks as early as possible facilitates fast and efficient Repair – and ultimately achieves our end game, improved customer outcomes.

In the Institute of Water Magazine Winter edition 2020 issue 204 published on December 14, 2019, Michael Butler discusses the changes in leakage economics for AMP7.