Ofwat has launched a new consultation on its proposed approach for the innovation fund over the next three years (2022-25).

The water sector regulator has now been operating the fund for just over a year as a pilot – Ofwat said it was encouraged by the level of interest, collaboration, as well as the quality and types of entries seen to date.

During the pilot period any organisation could enter the fund in partnership with one (or more) of the 17 water companies or eight NAVs in England and Wales.

Nearly 100 organisations have been involved so far, with water companies working in partnership with other water companies, water retailers, supply chain and a range of innovators both within and outside the water sector.

However, Ofwat believes there are key areas where further evolution of the fund would be beneficial over the next three years (2022-25). The key areas are:

• supporting more early-stage ideas through the innovation fund;
• allowing innovators to have greater access to the fund;
• encouraging a wider range of innovations to come forward, including from other sectors;
• reducing barriers to involvement with the fund; and
• facilitating new relationships and collaborations across the sector and from other sectors.

The consultation document sets out Ofwat’s proposals to: 

• split the remaining £120 million of the fund into three annual award amounts of approximately £40 million between 2022-25
• introduce a new competition targeted primarily at innovators to support earlier stage idea development
• allocate a portion of the funding (about £4 million) available for 2022-25 to this new competition and remove barriers to involvement;
• allow anyone to be a lead entrant in partnership with any organisation for the Water Breakthrough Challenge Catalyst stream
• allow owners of background IPR to charge a licence fee at a fair, reasonable and nondiscriminatory rate for entries to the Water Breakthrough Challenge Catalyst and Transform streams; and
• maintain all other elements of the Water Breakthrough Challenge Catalyst and Transform streams

The regulator is seeking views from anyone who may be interested in applying for the fund or is interested in the outcome of the fund such as:

• academia
• charities
• consultancies
• customers
• customer representative bodies
• industry bodies or associations
• manufacturers
• new appointment and variations (NAVs)
• non-governmental organisations
• start ups
• supply chain organisations
• technology providers
• water companies
• water retailers
• other regulators

Deadline to submit responses to the consultation is 17 May 2022 – click here to access the consultation document