Our leakage performance

Update for June 2020

Dean Vine is no stranger to providing life’s essential service to thousands of customers across London and the south-east.

As one of our leakage technicians, he helps maintain a network of pipes supplying homes, schools, hospitals and businesses with fresh water. Now he’s gone one step further, using his own time and money to buy and deliver food parcels for those struggling to get by during the coronavirus pandemic.

Dean Vine standing in front of Thames Water van

To date, he and his wife Natasha have spent £1,700 on more than 50 bags of shopping for NHS staff and the elderly and vulnerable near their home in Gravesend and Northfleet. We’ve now match-funded the amount with supermarket vouchers so Dean, pictured, can continue supporting his community.

Dean’s story was featured in the national media last month, and you can read more about his generous work in our news section.

Meanwhile, our final leakage reduction results for 2019-20 are being reviewed by external auditors as part of our annual reporting process. Current indications are positive, with the official figures due to be confirmed and formally reported to Ofwat in June.

While we await confirmation, it’s important for our teams to continue to deliver life’s essential service to our customers. Families, businesses and the NHS are depending on us.

During this critical time, finding and fixing leaks remains one of our biggest priorities, and we’re continuing with our wide range of activities to reduce leakage despite the unforeseen challenges.

As a result of current coronavirus restrictions, we’ve scaled down our efforts to find private leaks at our customers’ properties due to social distancing guidance, and the extra care needed to set-up sites safely on public streets means we have taken longer than normal to complete repairs.

Despite this, our leakage levels are lower than our target for the month and our backlog of repairs to water pipes are down to the lowest level in a decade.

Thames Water’s action on leakage

Reducing leakage is important to our customers and we remain focussed on building on our encouraging performance over the past 12 months. Our leakage level in April 2020 was 1 million litres per day (Ml/d) better than our mid-range forecast for the month. It also means leakage in April 2020 was 3% lower than the same time a year ago.

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

Our latest performance is in the context of the 27% reduction in leakage we’ve delivered between 2003/04 and 2018/19. We know more is expected, which is why we have ambitious plans to make further progress, focusing on two key areas. First, innovation and improving the productivity of our leak repair work. Second, improving our data to help us work smarter.

Innovation and productivity

In 2019/20 we fixed an average of almost 1,400 leaks every week. This figure is down to 1,122 leaks per week on average in April 2020 due to the widespread impact of coronavirus, including restricted access to homes.

Of the total number we fix, we know around a quarter of leaks are at our customers’ properties. While these are private leaks, outside of our vast network, we continue to work with our customers where possible to repair them – and in some cases we can do this free of charge.

As the majority of leaks we fix are hidden, our first challenge is finding them. To improve our efficiency and accuracy in doing this, we’re 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 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 a 12% efficiency improvement in ongoing leak repairs.

We’re also constantly looking for new technology and approaches to help us in our mission. For example, we’re doing this through:

  • Special in-pipe cameras to help locate difficult leaks.
  • ‘Fingerprinting’ our water zones to create a baseline and help us better understand where and why leakage occurs
  • Trialling new leakage detection techniques including Snipe the leakage sniffer dog

Improving our data

To help us make good decisions on resources and leakage reduction initiatives, it’s important that we have the most accurate and up-to-date data possible. This is because our leakage figures are affected by more than just the 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, but we’ve now changed the process to a six-monthly cycle 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 only 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 suggest we had underestimated unmetered household demand, and therefore overstated our leakage figures. This figure is currently being reviewed as part of our annual results process, and is subject to external audit for final approval. While this audit is underway, we have maintained the adjustment of 20 Ml/d to leakage that we applied in September 2019. We expect this adjustment to be higher and once we have confirmation of the final approved adjustment figure we will restate our leakage figure for April.

In addition to the benefits noted above, we’re now using data from over 398,000 smart meters that are consistently providing us with better information about water use at all types of properties. For example, they highlight properties with a continuous flow of water, which is an indication of a possible leak. Using data in ways like this has helped to prevent over 0.4 Ml/d of leakage in April 2020.

We’ve also installed 27,000 acoustic loggers to date, which has helped us detect almost 3 Ml/d of leakage in April 2020.

Coronavirus impact on leakage performance

The ongoing coronavirus outbreak and resulting restrictions have had a significant impact on our leakage reduction activities and performance this month.

We’ve scaled down our efforts to find private leaks at our customers’ properties, primarily due to social distancing guidance. This work requires us to find out whether the leak is on the property’s internal or external pipework. To do this, often our engineers would need to access customers’ properties and come into direct contact with members of the household. Given the current government restrictions and the paramount importance of the health and safety of our customers and employees, we’ve suspended this activity – except in cases where it’s essential.

In addition, many of the repairs to our pipes are on public roads and pavements. Given the current restrictions and guidance, we have to take extra precautions when doing this work to protect both our key workers and members of the public, and this takes extra time.

Finally, due to the unprecedented nature and scale of the restrictions, we’ve seen a large reduction in water use over the night-time period that we use to calculate leakage. A large part of this reduction is caused by industries that have either suspended or scaled 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. This is a complicated task given the ever-changing restrictions we all face. As a result, we have applied a careful but conservative approach to calculate 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 coronavirus restrictions and the effects they have had on our ability to deliver the levels of leakage activity in our original 2020-21 plan, we have formulated a new revised plan. This takes into account the impacts noted above, and has scaled down activity for the first quarter of this year – most notably it includes a lower number of repairs to private leaks at our customers’ properties.

Get involved

You too can play an important part in helping us achieve our targets.

Feedback: We’d like your feedback on our leakage performance information. Please get in touch to share your feedback, or to discuss how we may be able to make this report more accessible for you.

We’ve also started a conversation thread on our community platform to create further opportunities for you to talk to us and to each other, and share ideas on reducing leakage. We’re keen to engage with you in a meaningful way and we intend to use your feedback to improve our understanding of how leakage affects you, so that we can adapt our services to better meet your needs.

Leakage reduction - at a glance

Monthly leakage 2020/21

Ml/d Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Monthly leakage level 583603 612 593 607 591 605 586 615 630 - - -
Mid range monthly leakage 646 614 592 582 571 560 561 574 623 666 662 594
Variance -5 -25 -2 +1 +25 +20 +45 +25 +41 +7
Ml/d Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Monthly leakage level 603










Mid range monthly leakage 604 577 563 558 554 549 553 569 617 666 666 603
Variance -1










Year-to-date average leakage 2020/21

Ml/d Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
YTD average leakage 621 617 610 609 606 606 602 604 607 - - -
Upper forecast YTD average leakage
646
630 618 609 601 594 590 588 592 599 605/td> 604
Variance -25 -13 -8 0 +5 +12 +12 +16 +15
Ml/d Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
YTD average leakage 603










Upper forecast YTD average leakage

604

591 581 576 571 568 566 566 572 581 589 590
Variance -1










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 40 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.

Conclusion of Ofwat investigation – June 2018

Ofwat investigated our leakage performance in 2017. In August 2018, we agreed a package of financial and non-financial commitments with 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 will be 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 are 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.

Read more

Helpful links

Find out more

Please see the further sections below for some helpful background information on leakage, as well as more detail about our performance and our leakage reduction plan.

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.

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 3 years. Our results up to and including 2018/19 have been externally audited and confirmed.

Leakage table

*The 2019/20 leakage level is a provisional range as explained in more detail below.

With the operational leakage figures for the final month of the 2019/20 reporting year now available, our central forecast is that we will achieve our target. Prior to completing the year-end reporting and audit process, our provisional forecast range for our 2019/20 annual leakage level is 585 Ml/d to 605 Ml/d. This remains subject to the further validation and external audit work that is underway on the update of our leakage data in relation to unmetered household demand.

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 have committed to reducing leakage by over 15% from our 2019/20 target level by the end of 2025 and by 50% in the longer term.

Leakage reporting changes for 2020-25

April 2020 represents 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 currently going through the audit process to confirm both our leakage positions on both the old and new methodology. Once these have 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. Once we have confirmation from our auditors on our final leakage position for 2019/20, we will be able to calculate our three-year rolling average target. We will report against this target in the July report.

Headlines for April 2020

  • Our leakage level for March was 603 Ml/d, which is 3% lower than April last year and 1 Ml/d ahead of the plan for this year.
  • We completed 4,486 leak repairs in the month.
  • We repaired leaks which we estimate have prevented leakage equivalent to 22 Ml/d of water in April.

Leakage level

The graph below shows the actual amount of water lost from our network in April 2020, compared with the upper and lower forecasts in our leakage reduction plan. In April, our leakage level was 603 Ml/d, which is just below the mid range forecast level in our plan for April of 604 Ml/d.

The improved performance has been aided by several factors. Firstly, the backlog of repairs to mains pipes is down to around 106 jobs which is an improvement on the 115 jobs at the end of March and the lowest level in a decade. This has helped us reduce the time we take to repair non-visible leaks. In addition, as a result of the slightly warmer than average weather conditions, we didn’t see the level of visible leaks that we would normally expect over the month. This allowed our repair teams to focus on the existing non-visible leaks which provide the biggest leakage reduction benefit.

As noted, our leakage position of 603 Ml/d for April 2020 is reliant on the accuracy of two key factors. Our correction concerning unmetered household demand, which is currently subject to independent auditing, and the impact of coronavirus on our usage estimates. Once we have a better view of these two factors, there could be movement in the reported leakage position for April.

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 4,486 leaks in April 2020. This is 16% 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 28% behind plan. Non-visible repairs were 11% 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. Due to the slightly warmer than average weather conditions, visible leak repairs were 17% below plan.

Leakage reduction

The graph below shows the estimated volume of water saved from fixing non-visible and customer leaks in April 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 22 Ml/d of water in April. 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 April, 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 is very close to our planning assumptions. Our leakage level at the end of April is slightly 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 in the field 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.

In 2018/19 we did 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.

In 2019/20 we increased the number of leaks we find through:

  • ‘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.

Leakage reduction activities

In addition to leak repairs we have 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.
  • Mains replacement - We have a long-term programme of replacing or repairing worn pipes, and we prioritise the ones which may cause most disruption if they burst or leak.
  • 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.

The water saved from repairs appears to be lower than we’ve experienced historically. As leakage levels reduce to new all-time low levels it is likely that the average leak is becoming smaller. We’re innovating and working smarter to help target the areas that allow us to find the largest leakage benefits.

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.


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.