Our leakage performance

Update for August 2020

As we tackle leakage, we’re committed to working with our customers to help them look after their pipes too.

When a large London school saw water consumption shoot up by a staggering 600 per cent, their estate team tried to pinpoint the problem. And, after trying to fix the problem and reduce water consumption themselves, Harris Garrard Academy in Erith called in Thames Water’s leakage detection team to help. That’s when the team identified a 0.11 Ml/d leak on a pipe that ran close to a tree line on the customers’ property. The pipe itself led to the school’s laundry and changing room facilities, which is why there was such a huge jump in water use.

Tracy Sweeney, of Water Networks, said: “We pinpointed a long-standing leak that the customer’s estate team had been looking for and co-ordinated with the customer for a smooth, efficient repair.

“As part of the work, we also identified a lead supply pipe. We’re collaborating with our lead pipe replacement schools programme team to arrange the replacement of the old lead pipe leading to the Academy’s primary school with a new sustainable plastic communication pipe.”

Our action on leakage

We delivered a 95Ml/d reduction in annual reported leakage during 2019/20 – leading to our best performance in 30 years - and we’re continuing our focus on leakage reduction as we move through this regulatory period. Social distancing as a result of the Covid-19 pandemic has had an impact on our leakage activity and daily operations, however our leakage level for June was just 1 Ml/d above our mid-range forecast at 564 Ml/d, and we’re still on track for our target this year. This is a 5% reduction compared to June 2019 and we’re on track with our 20% reduction in leakage between 2019/20 and 2024/24.

Read about our detailed June 2020 performance and see our 2019/20 monthly and annual average leakage levels at a glance.

Our ambitious leakage reduction plan focuses predominantly on innovation, increased productivity and data-driven decision making. See below for further information about risks.

Productivity

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 - 98% of our leakage comes from hidden leaks.

In 2019/20, we fixed an average of almost 1,400 leaks every week. Restricted access to homes and social distancing guidance for the safety of our teams and customers, due to the impact of Covid-19, has led to a reduction in the number of leaks we’ve been able to fix in recent months. Find out more about the impact of Covid-19 on leakage reduction.

In June 2020 we fixed an average of 1,173 leaks every week. Although we’re not yet back up to the average number of leaks fixed each week during 2019/20, our performance during June 2020 represents an increase on April and May.

Of the total number of leaks we fix, a quarter are at our customers’ properties. While these are private leaks, not on our network, we continue to work with our customers where possible to repair them – and in some cases we can do this free of charge.

Innovation and data-driven decision making

As most leaks hidden underground never become visible on the surface, our first challenge is to find them. And to help us make good decisions on resources and leakage reduction initiatives, it’s important we have the most accurate and up-to-date data possible.

As we work to reduce leakage even further, below our lowest level for 30 years, we must be increasingly innovative in how we do this, and we’ve been improving the way we use data to drive decision making by:

• Rolling out smart water meters – When a smart meter has been installed and is transmitting data, we’re able to identify if there’s a leak through the recording of continual usage. We’re now using data from over 400,000 smart meters that are consistently providing us with better information about water use at all types of properties. Using data in ways like this has helped to prevent 2.5 Ml/d of leakage since the start of April 2020.
• 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’ve installed approximately 27,000 loggers and are repairing the leaks located as a result of the information the loggers are generating. Loggers have helped us detect over 15 Ml/d of leakage since the start of April 2020.
• More leak detection technicians – We’ve 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.
• Technology - such as in-pipe cameras to help locate difficult leaks.

We’re also developing two digital data-driven tools. The first identifies our leakiest water supply zones and the second helps us locate the leaks in those zones more quickly. The tools automate the analysis of multiple dynamic data sources, using algorithms and models to support our leakage analysts and technicians. The output from these tools is a clear and simple visual display of leakage information, including an up-to-date map of our network, colour-coded to show the highest-risk pipes and pipe repair history.

To help make our repair processes even more efficient, we’ve brought in new ways of working and have also created a data-driven performance management tool to help supervisors get the most from their repair teams. This involves a formal daily meeting structure between supervisors and scheduling teams, a standardised process and clarified responsibilities, as well as a bespoke ‘performance dashboard’ for supervisors that brings together key information about performance. Together with improvements to planning and scheduling of work, this enhanced performance management regime is expected to deliver an efficiency improvement in ongoing leak repairs.

In addition to increasing leak repairs and using data more effectively we’re also undertaking other leakage activities to generate a sustainable reduction in leakage such as:

• 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.

A better understanding of our leakage

Our leakage figures are affected by more than the amount of water that leaks from our pipes.

A key part of updating our leakage data is refining the assumptions we make about water use by unmetered households, which is affected by factors such as population growth and housing developments. In the past we made these updates on an annual basis, however we’ve moved to six-month updates and we’ll look to increase this frequency even further.

As part of this change, we’ve also taken a ‘big data’ approach to our analysis and have brought in new data to cross-reference against the information we already hold. This includes using the data from our smart meters to better understand the overall trends in our customers’ water use. We can then use that to inform our assumptions about water use by unmetered households. This is possible because smart meters give us 24 readings every day, compared to the one or two readings per year we would have received for the same customers before their smart meters were installed.

Updating our data in this way is important as it will help us improve our leakage reduction capability and delivery. Having better data on where leakage is happening allows us to concentrate our detection and repair efforts on the parts of our network where we can reduce leakage the most.

Preliminary indications from this work during 2019/20 suggested we had underestimated unmetered household demand and therefore had been reporting a higher level of leakage, as outlined in earlier versions of this report. The adjustment applied to our 2019/20 reported leakage figure (Annual Report for 2020), as a result of this analysis and following an in-depth review by our external auditor, was a more than 20 Ml/d reduction.

Leakage reporting changes for 2020 to 2025

A new leakage reporting methodology is being rolled out across the industry by our economic regulator, Ofwat, to better align reporting 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.

To enable this new approach, we’ve developed a new tool to implement the new reporting processes needed to ensure compliance with the agreed methodology and allow employees across the company to view our latest reported leakage. We had planned to move to the new leakage reporting methodology this month, however we’re performing some final data checks to ensure the accuracy of our new tool and aim to pilot it for our August leakage report. The new methodology will mean more consistent leakage reporting across the industry, but it will lead to some movement in our reported leakage level.

The audit of our new methodology has been completed. We will outline the impact of this audit in next month’s report when we move to the AMP7 reporting methodology. For this report, we’ve retained the adjustment of 20 Ml/d, and we will incorporate the new water balance adjustment, as approved by our external auditors, when we move over to the new methodology.

Impact of Covid-19 on leakage performance

The ongoing Covid-19 pandemic and resulting restrictions have had a significant impact on our leakage reduction activities and performance.

In the early months of the pandemic, we scaled down our efforts to find private leaks at our customers’ properties, primarily due to social distancing guidance. To carry out this work, our engineers often need to access customers’ properties, to find out whether the leak is on the property’s internal or external pipework, and therefore potentially come into contact with members of a household. Due to the government restrictions and the health and safety of our customers and employees being our priority, we suspended this activity, except in cases where it was essential.

With the recent easing of restrictions, we’ve now restarted work in this area whilst taking the necessary precautionary measures. Aided by more people being at home, the process to make appointments with customers has been easier. However, due to the suspension of this activity over the first couple of months of this year, it is unlikely we will be able to fully recover the shortfall in repair numbers this year. We intend to carry out more leakage activity in other areas.

Many of the repairs to our pipes are on public roads and pavements. Given the current restrictions and guidance, we’re taking extra precautions when doing this work to ensure social distancing and protect both our key workers and members of the public, and this takes extra time.

The pandemic has also had an impact on our ability to measure leakage. Due to the unprecedented nature and scale of the restrictions, we’ve seen a large reduction in water use over the night-time period, which is what we use to calculate leakage. This is predominantly due to industries either suspending or scaling down their operations. To correct for this, we’ve adjusted our night usage estimates to improve the accuracy of our leakage level calculation. We continue to monitor this very carefully to ensure the night usage estimates are as accurate as possible, however it’s a complicated task given the ever-changing restrictions we all face. As a result, we’ve applied a careful but conservative approach to calculating our leakage position. Once we are fully able to assess the impact of the restrictions on demand, we will have a more accurate view.

Due to the significant impact of the Covid-19 restrictions and the effects they have had on our ability to deliver the levels of leakage reduction activity in our original 2020-21 plan, we’ve put together a revised plan. It outlines scaled down activity for the first quarter of this year – most notably relating to a lower number of repairs to private leaks at our customers’ properties.

Leakage reduction - at a glance

Monthly leakage 2020/21

Year-to-date average leakage 2020/21

Notes:

1. The figures in the above tables are operational leakage data and therefore based on information from Thames Water source systems at a point in time. This data may be subject to a data refresh on a monthly basis and for year-end reporting.

2. The actual leakage level figures reflect the provisional 20 Ml/d adjustment from April 2020 to date relating to underestimated unmetered household demand (referenced in this report).

3.The 2020-21 plan has been uplifted by 20 Ml/d to be consistent with the 20 Ml/d adjustment.

4. Leakage for April 2020 has been revised following a detailed analysis of the impact of coronavirus restrictions, Ramadan and weather dependant night use, resulting in a 20 Ml/d reduction in reported leakage

Conclusion of Ofwat investigation

Ofwat investigated our leakage performance in 2017. In August 2018, we agreed a package of financial and non-financial commitments with our economic regulator, Ofwat under Section 19 of the Water Industry Act 1991. We refer to these as our Section 19 Undertakings.

As part of our Section 19 Undertakings we agreed to pay £120 million back to our customers. This money comes solely from Thames Water’s shareholders and is reflected in customer bills. In order to clarify and improve how we report leakage we appointed Victoria Borwick, former Deputy Mayor of London and former MP, as an independent monitor of our monthly leakage reporting. Victoria brings highly relevant experience of reporting and communicating complex matters to the public. We’re working with Victoria to provide external and independent feedback and challenge to how we engage with and improve customer understanding of our leakage targets and performance against these.

Tonia Lewis continues to fulfil the role of Undertakings Compliance Officer. This role is responsible for ensuring overall compliance with the Undertakings and providing regular updates to our Board and Ofwat. We provided our fourth 6-monthly review of our compliance against our Undertakings  to Ofwat on 30 April 2020 and will be meeting Ofwat in August to discuss this report further.

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The information provided is, to the best of our knowledge, accurate, but may be subject to change from time to time. The information does not represent formal annual regulatory reporting.