How technology could plug the gaps in our water systems

Picture the UK in the middle of a heatwave and certain images come to mind. Perhaps it’s Bournemouth beach covered in multicoloured towels and melted ice creams, or sausages being incinerated on the barbecue. Or perhaps it’s endless newspaper headlines threatening hosepipe bans. For many of us, it’s only during a hosepipe ban that we really think about this most essential of resources, and the possibility that the taps might one day run dry.

Globally, scarcity of clean water is an increasing problem driven by climate change and population growth. The total number of people on Earth is expected to rise from 7.9 billion today to 9.7 billion in 2050, potentially peaking at about 11 billion around 2100.¹

Money down the drain

Adding to these structural pressures is the perennial problem of leakage through the pipes that connect our homes to water treatment facilities. The UK alone has 346,455 kilometres of water pipes, and although the amount of water lost to leakage is currently the lowest it’s ever been, the system still loses enough water every day to fill 1,245 Olympic-size swimming pools. Little wonder, then, that reducing leakages remains a number-one priority for the industry.²

Identifying leaks across a system that big isn’t straightforward, and the traditional approach of tackling individual leaks across confirmed locations is slow and inefficient. However, a range of technologies are revolutionising how leaks are detected, and even encourage consumers to think about how they can save water at home.

One such technology is a water logger. This is a device fitted onto existing water meters that allows utility companies to see the amount of water passing through and to detect potential leakages.

Another is water sensors, which can be installed in any location to check for the presence of water. In a residential setting, Wi-Fi enabled sensors can send notifications to the homeowner’s smartphone, warning them of leaks and potentially preventing both water loss and property damage.

A smarter way to reduce leaks

If there’s a flagship technology in the mission to improve the efficiency of our water networks, it’s surely smart meters. They can offer both utilities and consumers access to detailed information on water consumption and could play a role in targeting leaks across the network. According to Severn Trent Water*, 30% of leaks come from the customer’s side, predominantly in pipework outside homes – smart meters could help identify these hard-to-find problems.

The potential of smart meters to save resources has resulted in rapid adoption. In Europe, more than 20 million smart meters were installed in 2020, and installations are expected to increase by about 40% through to 2027.³ In the UK, the smart meter network has passed the 21 million mark, with almost a million added in May and June of 2022 alone.⁴

In terms of the savings that smart meters could deliver, independent research shows that a coordinated roll-out of smart metering across the UK would deliver £4.4 billion in benefits to society against costs of £2.5 billion, representing a net benefit of £1.9 billion.⁵

While helping water utilities identify leaks makes a strong case for smart meters, their potential to change consumer behaviour could ultimately result in even greater environmental benefits. This is one consideration among many that helps inform our approach to thematic investment in the water space.

As pressure on clean water supplies increases globally, incentivising consumers to use water wisely will be an important way to protect this most basic yet precious resource.

* For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security.

1. Source: https://www.un.org/en/global-issues/population#:~:text=The%20world's%20population%20is%20expected,nearly%2011%20billion%20around%202100.

2. Source: GWI March 2022 https://www.globalwaterintel.com/

3. Source: https://www.gminsights.com/industry-analysis/europe-smart-water-meter-market

4. Source: https://www.energylivenews.com/2022/07/12/smart-meter-network-hits-21-million-milestone/

5. Source: https://www.arqiva.com/news-views/news/smart-water-metering-rollout-could-deliver-19-billion-net-benefit-to-society