Our leakage performance

For all water companies, leakage is made up of any water that they are unable to account for as having been used by someone. As you would expect, this includes any water that is lost from the pipe network into the ground – ‘true’ leakage. However, it also includes any water use of which a water company isn’t aware, such as illegal use and any higher-than-estimated use by households and businesses that don’t have a meter.

We supply almost one third of the water used by people and businesses in England and Wales each day, to ten million customers, through 31,550 km of water pipes.

To estimate leakage, like all water companies we compare the measured volume of water we put into supply against the volume we estimate is being used. The difference between these two values is what we record as leakage. We measure leakage in millions of litres per day (Ml/d). As an idea of scale, an Olympic-size swimming pool (50m x 25m x 2m) contains 2.5 million litres of water.

There are many factors that affect ‘true’ leakage, but the three main ones are:

• Natural wear and tear on our network – if we were to carry out no work, other than repairs of visible leaks reported to us by our customers, we estimate that leakage would increase by 322 Ml/d over the year due to the wear and tear buried pipes experience from ground movement and pipe corrosion, as well as the repeated stresses to which they are subjected.
• The seasons – in typical weather conditions, the colder winter months increase leakage due to pipes shrinking, causing the joints between them to open up. Equally, warmer temperatures can undo this effect to reduce leakage. This is expected to even out over the year but leads to peaks and troughs in leakage levels.
• Extreme weather events – can impact leakage over and above the typical seasonal rise and fall. A freeze followed by a rapid thaw can over-stress pipes causing them to burst. Similarly, prolonged hot dry periods can shrink the earth that supports pipes, causing them to move and break.

Our reduction in reported leakage from 2018/19 to 2019/20 was 95 Ml/d – which is enough water saved to fill 38 Olympic sized swimming pools every day. Our final position was 595 Ml/d against our target of 606 Ml/d.

Leakage levels change throughout the year, therefore to measure and report our performance we take our daily leakage figures (in Ml/d) and average them for each month and in turn across the year.

Our actual leakage performance since 2015/16, compared with our targets, is shown in the table below. We beat our target in 2015/16 but missed it for the following three years before out-performing our target in 2019/20. Our results up to and including 2019/20 have been externally audited and confirmed.

Leakage reduction remains one of our top priorities and we’re now focussing on our leakage reduction plans for the next five years and ensuring we maintain our current levels of performance.

We’ve committed to reducing annual average leakage by 20% from our 2019/20 level by the end of 2025 and by 50% in the longer term.

Leakage reporting changes for 2020-25

April 2020 represented the first month of the new business plan period, which runs from 2020-2025, and changes to how all water companies report leakage.

New reporting methodology has been introduced by our regulators to improve transparency and benchmarking across the industry. In addition, leakage targets will also be moving from an annual target to a three-year rolling average target for all companies.

We’re still going through the audit process to confirm both our leakage positions on the new methodology. Once this has been successfully passed through audit, we will have a new base level for the last three years. This means it is likely that there will be movement in the leakage level and our future targets due to the changes to the new methodology.

Currently our annual leakage target for 2020/21 is 590 Ml/d. This has been calculated using the 2015-2020 methodology. In the coming weeks, as we switch over to the 2020-25 reporting methodology, this target will be reviewed and reported against in the July update.

Headlines for May 2020

• Our leakage level for May was 578 Ml/d, which is 6% lower than May last year and 1 Ml/d below the plan for this year.
• We completed 3,911 leak repairs in the month.
• We repaired leaks which we estimate have prevented leakage equivalent to 19 Ml/d of water in May.

Leakage level

The graph below shows the actual amount of water lost from our network in May 2020, compared with the upper and lower forecasts in our leakage reduction plan. In May, our leakage level was 578 Ml/d, which is just above the mid-range forecast in our plan for May of 577 Ml/d.

The current coronavirus restrictions have considerably impacted repair performance, especially on the number of customer leaks we’ve been able to repair. As a result, we’ve not been able to carry out the number of repairs we had planned which will impact our leakage performance compared to our plan. Work is ongoing to develop plans of work that will enable us to recover this shortfall later in the year.

In recent months, the impact of coronavirus, combined with the very warm weather throughout May, has meant many of the demand assumptions we use to calculate leakage have needed to be revisited. We’ve used data from a range of sources to enhance our leakage calculations. These include using data to understand the impact of coronavirus on commercial night-time usage, smart meter data to correctly allow for changes to domestic night usage and also to understand demand changes due to the hot weather. The result of this complicated piece of work has meant we’ve updated our leakage position since the start of April to account for these changes in demand patterns.

Note: The actual leakage level figure reflects the provisional 20 Ml/d adjustment relating to underestimated unmetered household demand (referenced in this report).

Leaks fixed

We fix three different types of leak. On average:

• About half are non-visible leaks - these are below the surface and aren’t easy to find. We find them using data, technology, and people. Fixing non-visible leaks has the biggest impact on reducing leakage.
• About a quarter are visible leaks - these are easy to see, for example on pavements or roads.
• About a quarter are customer leaks - these are within the boundary of a customer’s property up to the point where the pipe enters their home/building.

As shown in the graph below, we fixed 3,911 leaks in May 2020. This is 21% below our overall plan for the month. The coronavirus restrictions have reduced the number of repair jobs we’re able to do, particularly customer leak repairs which were 78% behind plan. Non-visible repairs were 6% below plan which were impacted by the ongoing coronavirus restrictions, especially social distancing, with more time needed to carefully set up each site to ensure the safety of both our employees and passing customers. Visible leak repairs were 4% below plan.

Leakage reduction

The graph below shows the estimated volume of water saved from fixing non-visible and customer leaks in May 2020, compared with our plan. We don’t include visible leaks because they are not considered to reduce the underlying level of leakage.

We repaired leaks which we estimate have prevented leakage equivalent to 19 Ml/d of water in May. This was 8 Ml/d below our plan as a result of repair numbers for non-visible and customer leaks being below target levels for May, largely due to access restrictions caused by the coronavirus pandemic.

Performance against our plan

You can see our 2019/20 monthly and annual average leakage levels at a glance here.

The improved performance over the last year has meant that our starting leakage position for 2020/21 was very close to our planning assumptions. Our year to date leakage level at the end of May is favourable to our plan, although the impact of coronavirus means we are behind our planned levels of activity.

As explained in this report in previous months, the leakage reduction values above include an adjustment for the estimated volume of water saved from our non-visible and customer leak repairs. The level of this adjustment remains under continual review as we make improvements to our repair processes and the accuracy of how our leakage repair jobs are classified.

Improving the accuracy of categorisation of work we carry out and how this is captured is an area we’ve been working hard to improve. We believe that longer term there will be benefits for leakage targeting and our overall leakage reduction strategy to be gained from improving data quality that will then allow the application of advanced data analytics. We have a number of activities in place to address data improvements, such as issuing a guidance booklet to our repair teams that details the process for capturing repair activity.

In addition, we have a programme of initiatives aimed at improving the accuracy of measured and unmeasured customer water use. This includes recording usage patterns, meter accuracy and improving property/occupancy data.

We remain committed to doing all we can to reduce leakage. This is a key area of focus for our Executive and Board. Our Leakage Task Force reviews our performance and reduction plans each month to ensure we retain control over the way in which our leakage reduction plan is carried out. We also maintain a dialogue about our leakage reduction plan with our key stakeholders.

Innovation in finding leaks

Fixing leaks is one of the key activities we undertake to reduce leakage. Because fixing non-visible leaks has the biggest impact on reducing leakage, we prioritise them whenever we can. But, to fix more non-visible leaks, we first need to find them on our pipe network. As we work to reduce leakage below our all-time lowest level, we have to be increasingly innovative in how we do this.

We have been doing this by:

• Smart water meters - When we install a customer meter, we can immediately identify if there’s a leak. Our programme to install smart water meters is the second largest in the world and will help protect future water supplies.
• Installing acoustic loggers - Acoustic loggers listen for the noise water makes as it leaks from pipes. They help us to improve the efficiency of leak detection. We installed approximately 27,000 loggers and are repairing the leaks located as a result of the information that the loggers are generating.
• More leak detection technicians - We increased the number of leak detection technicians working for us, and we introduced a programme of field audits to validate their work. They use data to judge where leaks are occurring and tell repair teams where to dig.
• ‘Fingerprinting’ our water zones – We’re using key data about each of our water zones to begin to create unique fingerprints for each of them. That in turn will help us to understand the drivers of leakage performance and burst mains through various analysis methods.
• Temperature analysis – Working with a number of other water companies, we’re in the early stages of developing an innovative leak detection method that aims to use temperature data to pinpoint areas with larger leaks that are difficult to detect.
• Leak analysis – We’re starting to look at how soil conditions can cause visible leaks, so that we can build up a better understanding of the environmental conditions that lead to leaks.
• Digital detection tools – We’ve been developing two core products to help us detect leakage more quickly and efficiently by first targeting the right areas of our network, and then focussing on the right streets within those areas.

Innovation focus: ‘Fingerprinting’ our water zones

We supply water to 10 million customers through 20,000 miles of water pipes every day. The pipes across our network vary in age, material and size, but there many other factors that can affect their condition, including the type of soil they are laid in, water pressure, the traffic load from above and even tree roots.

This is why we need to tailor our approach to reducing leakage for each unique region and why we’ve developed a ‘fingerprinting’ approach to our water zones, with each containing around 1,500 properties on average.

The ‘fingerprinting’ initiative was developed by the Leakage Task Force with the aim of developing a simple and agile data analytical tool to provide regional and localised performance information. It allows us to learn from past performance and understand why some areas leak more than others.

We also review the efficiency of past and current interventions that have improved or worsened leakage performance. Once we’ve undertaken the historical analysis, we then consider how best to operate in each individual region and develop future plans.

The fingerprinting approach is a key part to how we tackle leakage reduction over the next five-year period and beyond. This will allow us to apply the correct type of leakage intervention at the correct moment in time, meaning we get the best possible outcome of investments in our network.

Leakage reduction activities

In addition to leak repairs we've additional leakage reduction activities taking place. These activities are intended to generate a sustainable reduction in our leakage levels and they include:

• Pressure management - We manage the water pressure within parts of our network to reduce the likelihood of pipes bursting. This also reduces the amount of water lost through existing leaks.
• Accounting for all water used - We're continually trying to improve our estimate of water used from our network. This activity focuses on stopping illegal use (for example unlicensed standpipes and illegal connections), replacing faulty customer meters, and ensuring all properties are registered on our billing system correctly.

Risks to our plan

The two largest risks to us meeting our target in 2020/21 are the impact of the on-going coronavirus pandemic and the weather.

The impact of the current restrictions has meant our leakage activity performance is behind our original plan and likely to remain behind plan for at least the rest of the first quarter of this year. We’re continuing to closely monitor official guidance and are working to a revised plan, which we will keep under review as official guidance changes.

Typically, the weather is the largest risk to our leakage level each year, as both extreme cold and hot conditions can increase leakage levels. To mitigate this risk, we continually review and update our leakage reduction plans against a range of short and long-term weather scenarios. We formally review our plans every three months to assess performance and identify areas where we need to undertake additional activity. This work enables us to review the resource requirements and ensure they are enough to detect and repair the number of leaks required.

Other material risks that we monitor are the effectiveness of our leak measurement models, our understanding of how our pipes react to rapid changes in weather, and our ability to pre-empt network deterioration. Our Leakage Task Force is addressing these and other questions to ensure our planning assumptions and leakage reduction strategy are effective.

To ensure effective control of the above risks, we’ve assigned senior managers to drive performance in key areas we know are challenging, such as leakage detection and repair output performance, data capture, analysis of leaks fixed and job auditing.