Smart Water Magazine
Connecting Waterpeople

You are here

Severn Trent secures £6.3m from Ofwat Innovation Fund to generate customer benefits

  • Severn Trent secures £6.3m from Ofwat Innovation Fund to generate customer benefits
  • Initiatives will help customers to reduce their bills while helping the environment
  • Severn Trent will deliver the projects in partnerships with organisations including Nectar, E.ON  and Horiba-MIRA
  • Funding will also be spent to research how to capture and reuse waste heat from sewers to heat homes and businesses – with a UK-wide potential to heat 33 million homes!

About the entity

Severn Trent
We were founded in 1974 as a regional, state-owned water authority based in the Midlands and responsible for water supply management, and waste water treatment and disposal.


Severn Trent has secured funding of over £6.3 million for the delivery of four innovative projects that will help to support customers in keeping their bills low, reduce carbon generation, and create mineral-rich fertiliser to support agriculture.

The four projects, which will include further funding from Severn Trent to bring their total value to £7 million, are:

  • A partnership with the Nectar loyalty and reward programme (and in collaboration with the Community Council for Water, South Staffs & Cambridge Water, Hafren Dyfrdwy, and Portsmouth Water) which incentivises water-efficient behaviour by offering Nectar points
  • Development of a system to capture waste heat from sewers and use it to heat homes and businesses, in partnership with E.ON and Horiba-MIRA
  • Leading an investigation into the removal of PFAS “forever chemicals” from the water network, in collaboration with Cranfield University, Southern Water, Yorkshire Water, Thames Water, Hafren Dyfrdwy, Scottish Water and Spring
  • Exploration of routes to market in the UK for biochar, a mineral-rich fertiliser to support agriculture

One of the projects features an innovative partnership with leading loyalty platform, Nectar.

This project will help incentivise customers to use less water, with customers rewarded with Nectar points for water-efficient behaviour, which can be spent in-store or online at Sainsbury’s to get money off a shop, or they can be spent at partners including Argos, eBay and Esso.

This supports government targets and water industry commitments to bring down average consumption from 146 to 110 litres per person per day by 2050.

Rich Walwyn, Head of Asset Intelligence and Innovation at Severn Trent said: “The challenges that climate change and population growth are presenting require innovative solutions. The UK faces a significant water supply/demand deficit of four billion litres a day by 2050 and the government has asked all water companies to help bring down individual use.

“Unlike seasonal demand reduction campaigns – which often focus on shorter-term behavioural change – by offering incentives on an ongoing basis, we can help to contribute to year-round changes.

“Nectar are the UK’s largest loyalty scheme and we are excited to be partnering with them. Our partnership with represents a utility sector first and turns the typical reward scheme on its head by rewarding people for using less. This can lead to a reduction in peoples’ bills and help us to reduce the amount that we need to abstract from watercourses, supporting the environment.”

Dom Winchester, Loyalty Strategy Director at Nectar, said: “We are really proud to be partnering with Severn Trent to deliver this utility-sector first. This is an exciting project which draws a direct line between reducing home water use – which helps people to reduce their bills as well as positively impact the environment – and being rewarded with points to spend on the things they love.

“We know that in the Severn Trent region, a good proportion of their customers are active Nectar users, so the scheme will be relevant to many people in the area.”

Another of the projects is in partnership with E.ON and Horiba MIRA to help capture and convert waste heat from wastewater to provide heating for buildings. It will see the installation of the UK’s first in-sewer wastewater heat recovery system and an energy centre at Horiba MIRA’s technology park in Warwickshire, which will provide a testbed for the project.

Rich Walwyn continued: “We have set ourselves some really ambitious targets to reduce greenhouse gas emissions and combat climate change – including the launch of the world’s first Net Zero Hub.  UK water companies treat approximately 11 billion litres of wastewater every day, which could offer around 400 TWh of renewable heat – that’s enough to heat 33 million homes!

“Having an in-sewer heat capture solution means that unlike options that capture heat from a sewage treatment works, this system can be placed close to where the heat will be used, reducing the amount of additional infrastructure required.

“E.ON and Horiba MIRA are absolutely fantastic partners to have on board for this project, building E.ON’s extensive experience of delivering a similar system in Germany.”

All the data and learnings from the project will be openly shared with other water companies in England and Wales, promoting best practice.

The third project will investigate a new, standardised method for destroying so-called “forever chemicals”, otherwise known as PFAS. These chemicals are widely used in everything from adding non-stick coatings to pans, to waterproofing coats and are already known to have impacts on human health and wildlife. 

The funding will be used to review and explore the best methods to destroy PFAS chemicals, enabling water companies to make informed decisions on the best courses of action to take to protect customers and the environment. 

The final project will examine the value of biochar – a byproduct of the sewage treatment process that can be manufactured into an organo-mineral fertiliser – and explore potential routes to market, speeding up its adoption.

Currently, the UK water industry recycles 3.5 million tonnes of biosolids to land to boost soil health  every year. This project will be linked to work Severn Trent is already undertaking to explore options for getting more value from biosolids by converting it to biochar, which is then used to create organo-mineral fertilisers and other useful products.

Helen Campbell, Senior Director, Ofwat said: “There are big challenges in the water industry that must be solved, some are well known and others are less so. In our fourth Water Breakthrough Challenge we called for solutions with potential to deliver wide-scale, transformational change for customers, society and the environment – and that’s exactly what today’s winners have done.

“From raingardens to prevent flooding to green energy from treated sewage, innovations to cut the water sector’s carbon footprint to robots that patrol the pipe network, the winners are all helping shape a more sustainable and efficient water sector.”

All projects are due to start soon and be completed by the end of 2026.

The Water Breakthrough Challenge is part of a series of competitions from Ofwat, run by Challenge Works with Arup and Isle Utilities, designed to drive innovation and collaboration in the sector to benefit individuals, society and the environment.

It supports initiatives that help to tackle the biggest challenges facing the water sector, such as achieving net zero, protecting natural ecosystems and reducing leakage, as well as delivering value to society.

Subscribe to our newsletter

Topics of interest

The data provided will be treated by iAgua Conocimiento, SL for the purpose of sending emails with updated information and occasionally on products and / or services of interest. For this we need you to check the following box to grant your consent. Remember that at any time you can exercise your rights of access, rectification and elimination of this data. You can consult all the additional and detailed information about Data Protection.

Featured news