Our leakage performance

In August 2020, we updated our leakage calculation to be in line with new industry-wide reporting requirements to improve transparency and benchmarking between companies. Learn more about the reporting changes. The figures in this section have been updated to be consistent with the Ofwat AMP7 leakage reporting methodology.

Leakage level

The graph below shows the estimated amount of water lost from our network in November 2020, compared with the upper and lower forecasts in our leakage reduction plan. Our leakage level was 560 Ml/d, which is above the mid-range forecast in our plan for November of 541 Ml/d.

Due to Covid-19 restrictions we’ve not been able to carry out as many leak repairs in the year-to-date as we had planned to and, despite improvements in recent months, we still have a large deficit to recover compared to our plan.

Despite the challenges, we’re doing what we can to develop new ways of recovering as much of the shortfall as possible before the end of the financial year, and every quarter we’re reviewing our plans to address changes in guidance and the impact of Covid-19 on performance levels. We still expect to achieve our target this year and remain on track with our 20% reduction for the current five-year regulatory period.

Leaks fixed

We fix three different types of leak.

On average:

• c.50% are non-visible leaks - these are below the surface and aren’t easy to find, however fixing them has the biggest impact on reducing leakage
• c.25% are visible leaks - these are easier to see, for example on pavements or roads. We forecast the number we expect to repair based on an average year.
• c.25% 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 5,325 leaks in November 2020. This is 7% above our overall plan for the month.

• Non-visible leak repairs were 23% above target
• Visible leak repairs were 17% below forecast, due to milder than average weather
• Customer property leak repairs were 11% below target.

Leakage reduction

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

We repaired leaks which we estimate have prevented leakage equivalent to 30 Ml/d of water in November, which was 2 Ml/d above our plan, due to non-visible leak repairs being 23% more than planned. The increased repairs for non-visible more than compensated for the shortfall in repair numbers on customer properties which have been affected by the ongoing restrictions.

We supply almost one third of the water used by people and businesses in England and Wales each day, to 10 million customers, through 20,000 miles of water pipes.

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. 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).

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 leakage would increase by 322 Ml/d over the year due to the wear and tear on pipes caused by ground movement and pipe corrosion, as well as other repeated stresses.
• Seasonal changes – in typical weather conditions, the colder winter months increase leakage due to pipes shrinking, causing the joints between them to move apart. 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.

We aim to reduce our reported leakage by 20% between 2020 and 2025. To get there, our ambitious leakage reduction plan focuses predominantly on a mix of innovation, increased productivity and data-driven decision making. Find further information about the risks to reducing our leakage.

Productivity and the impact of Covid-19

Fixing leaks is one of the key activities we do to reduce leakage. Visible leaks are our highest priority and then we prioritise fixing our largest hidden leaks, where possible, as it has the biggest impact on reducing leakage - 98% of our leakage comes from hidden leaks. In 2019/20, we were fixing an average of 1,400 leaks every week.

The impact of Covid-19 has affected leak repairs. In November 2020 we fixed an average of 1,331 leaks each week, which is a 7% improvement on October. Repair performance improved towards the end of September, exceeding 1,300 for the last two weeks of the month. This has continued in November with weekly repairs exceeding 1,300 repairs for three of the four weeks in the month.

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 to protect both our key workers and members of the public, which means the work takes extra time. We’ve also had teams self-isolating which has also had an impact on the number of leaks we’ve been able to fix.

Customer side leaks

While these are private leaks, not on our network, they contribute to our leakage and we work with our customers to repair them, where possible. In some cases, we can do this free of charge.

The health, safety and well-being of our customers and colleagues is our number one priority and in the early months of the pandemic, we had to suspend this activity, except in essential cases. 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 could therefore come into contact with members of a household. With the easing of Government restrictions and appropriate safety protocols being put in place to protect our people and our customers, we restarted this work. And with more customers being at home, the process to make appointments has been easier.

However, due to the suspension of this activity over the first couple of months of this year, the ongoing impact of Covid-19 and evolving guidance, it is unlikely we will be able to meet our planned number of repairs this year. We intend to carry out more leakage activity in other areas to recover as much of the shortfall as possible, as is evident in the number of non-visible leak repairs this month being above our target.

Measuring leakage during the pandemic

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 been seeing 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. When we can fully assess the impact of the restrictions on demand, we will have a more accurate view.

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 data possible.

As we work to reduce leakage even further, 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 over 12 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 and therefore, help us to improve the efficiency of leak detection. We’ve installed approximately 27,000 loggers and are repairing the leaks as a result of the information the loggers are generating. Loggers have helped us detect over 43 Ml/d of leakage since the start of April 2020.
• ‘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 understand the drivers of leakage performance and burst mains through various analysis methods.
• Pipe Testing Rig – We are building a test rig that will allow us to investigate the performance of water pipes and fittings in a live, pressurised, environment at our Kempton Water Treatment Works. We will be able to simulate the impact of pressure fluctuations, temperature variations and operating conditions on a wide range of pipes up to 36” in diameter allowing us to better understand the impact of material and age on performance.

We’ve also developed two digital data-driven tools, which automate the analysis of multiple dynamic data sources, using algorithms and models to support our leakage analysts and technicians and increase the efficiency of leak detection.

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.

We are also an active member of UKWIR (UK Water Industry Research) which is responsible for facilitating the shaping of the water industry’s research agenda. One of the current research areas is looking at the aspirational target of zero leakage by 2050.

As well as contributing to the UKWIR research programme our Research, Development and Innovation programme has four research areas that map the UKWIR's themes into our priorities for tackling leakage:

• Prevent: This area is looking to understand the impact we have on our own network and minimise actions that cause deterioration. An example of the work included in this area is the effect that changes in pressure, as a result of changing pumping to supply demand, has on the network – both in terms of bursts and leakage.
• Aware: This activity is looking to identify what is, and isn’t, leakage. This includes activities such as distinguishing leakage from usage, as well as preparing deeper research into finding big leaks and better identifying areas that would benefit from investment. This uses ‘machine learning’ on historic leakage and repair records to select detection techniques that generate areas of interest with the biggest leaks
• Locate: Understanding the future of leak detection technologies and how these can be improved. For example, using our acoustic loggers to identify the location and size of a leak as well as the occurrence of a leak. Coupled with the work on ‘Aware’, this creates a better understanding of which leak detection techniques should be used in a situation and/or area.
• Mend: This is looking at what the future of repair technologies may look like. For example, can we minimise the impact we have on the environment by reducing the size of the hole we dig when we repair a leak? Could it be possible to undertake repairs on our network without digging a hole – referred to as “No Dig” techniques? Research in this area is also looking at how we minimise the cost and time taken to make a repair therefore reducing the impact on our customers.

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. We’ve made these updates on an annual basis in the past but have now 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 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.

The work we carried out in 2019/20 to understand the demand for water at night by our unmetered household customers identified we had underestimated the amount being used. This includes both consumption and leakage from pipes, including dripping taps inside homes. Our analysis used data obtained from our smart meters installed across London and resulted in a reduction in leakage of 24 Ml/d.

We also saw a reduction in leakage of 6 Ml/d compared to our 2018/2019 annual report through the standard update to our ‘water balance’, which includes taking account of things such as increasing population and property numbers, and that are only updated at the end of the year. The adjustment was applied to our 2019/20 reported leakage figure (annual report for 2019/2020) following an in-depth review by our external auditor.

Leakage levels change throughout the year, so 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.

The table below shows our leakage targets for the 2020/21 to 2024/25 period. Our leakage targets are now based on a percentage reduction from a baseline leakage level. The baseline leakage level is calculated using our annual average leakage for the three years between 2017/18 to 2019/20 and taking an average of these 3 values.

Our target for 2020/21 is a reduction of 4.1%. To achieve this reduction, we need to achieve an annual average leakage level of 569.5 Ml/d or lower. All the figures in this table have been calculated using the AMP7 leakage methodology and therefore historic data will differ from previous reports.

Leakage Targets for 2020/21 to 2024/25 and Baseline Leakage for 2017/18 to 2019/20

(All figures in Ml/d, except Leakage Reduction)

Leakage reduction remains one of our top priorities and we’re focusing on delivering our leakage reduction plans for 2020 to 2025 and ensuring we continue to improve our 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.

Performance against our plan

You can see our 2020/21 monthly and annual average leakage levels at a glance here.

Our improved leakage performance during 2019/20 meant that our starting position for 2020/21 was ahead of our planning assumptions. Our year to date leakage level at the end of September was in line with our planning expectations, although the impact of Covid-19 meant we were behind our planned levels of activity. Due to the ongoing restrictions and the knock-on impact of the reduction in planned activity during the first national lockdown, we’re now behind our original planning forecast leakage levels. We have reforecast our activity to recover this position by the end of the year.

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 several 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 Team and our 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.