Our leakage performance

Leakage fact for October 2019

Thank you for visiting our dedicated leakage performance report.

Leakage is a complex and challenging topic for all water companies, so we’re bringing it to life each month with a ‘Leakage fact’ at the beginning of this report. Read on for October’s fact!

You may be surprised to learn that around one in 10 households have a leaky loo. Leaky loos of course waste water, but not getting one fixed could also be increasing your water bill significantly. The average one wastes as much as 400 litres of water every single day – that’s similar to the daily normal water usage of a family of four!

To find out more about this, as well as how you can fix a leaky loo and save money, please see the conversation thread on our community platform.

We hope you find this helpful – and please remember to use water wisely, whatever the weather.

How we’re tackling leakage

We’ve reduced leakage by 27% over the past 15 years. Reducing leakage further is a top priority for us and we have ambitious plans to do this.

That’s why we continue to take positive action and spend more than £1 million every day on leakage prevention and maintenance of our network. By doing this work, we estimate we saved 448 million litres per day (Ml/d) of water in 2018/19.

To help us reach our targets, we have a range of proactive leakage reduction activities that are intended to generate a sustainable reduction in our leakage levels, including pressure management, mains replacement and metering. For example, we used data from the 327,000 smart meters installed to date to prevent over 12 Ml/d of leakage.

In addition to our proactive work, we’re also fixing a record number of leaks – more than 1,400 every week on average. To achieve this we:

  • Increased the number of crews dedicated to fixing leaks by 21% in 2018/19, which has delivered a 23% increase in fixed leaks.
  • Installed 27,000 acoustic loggers to date, which helped us detect around 46 Ml/d of leakage during 2018/19.
  • Continue to work with our customers to repair their leaks free of charge.

You too can play an important part in helping us achieve our targets. If you spot a leak, whether that’s in the road or at home, you can now use our new and improved ‘Report a problem’ page to let us know. We’ll then be able to fix the leak or give you advice about how you can get it repaired if it’s at your home.

Leakage is the amount of water lost from pipes across the water network. We supply almost one third of the water used by people and businesses in England and Wales each day, to ten million customers, through over 32,000 km of water pipes.

There are many factors that affect leakage, but the three main ones are:

  • Natural wear and tear on our network – if we were to carry out no work, 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.

To estimate our leakage, we employ an industry-standard method. This method compares the measured volume of water we put into supply against the volume we estimate our customers are using. The difference between these two values is what we record as leakage. We also take water pressure into account, as this affects the amount of water lost through leaks.

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.

We’ve set annual leakage targets up to 2020. 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.

For the last 4 years actual leakage compared with our targets is shown in the table below. We beat our target in 2015/16 but have missed it for the last 3 years. The results have been externally audited and confirmed.

 

Our target for 2019/20 of 606 Ml/d requires a reduction of 12% from our 2018/19 annual average. This reduction would be the highest level of reduction seen since 1999/2000. We’re committed to doing all we can to hit it.

While we continue to do all we can, we recognise that achieving 606 Ml/d will be a significant stretch. This is due to the inherent challenge of reducing leakage below our all-time lowest level and the uncertainty around how our network will respond to the significantly increased levels of planned activity needed to achieve our target. When taking these risks into account, we believe 636 Ml/d is a more realistic leakage forecast for 2019/20. Even at this level, the reduction would be nearly 8% and represent the highest level of leakage reduction in one year since 2007/08.

Leakage reduction remains one of our top priorities and we continue to strive to deliver our 606 Ml/d target. Keeping our stakeholders updated about our leakage performance and forecasts also remains a priority.

We also remain committed to reducing leakage by 15% from our 2019/20 target level by the end of 2025 and by 50% in the longer term. We’re working with our regulator to agree these future targets.

Headlines for August 2019

  • Our average leakage level for August was 612 Ml/d, which is 9% lower than August last year.
  • We completed 5,132 leak repairs in the month.
  • We repaired leaks which we estimate have prevented leakage equivalent to 22 Ml/d of water in August.

Leakage level

The graph below shows the actual amount of water lost from our network in August 2019, compared with the upper and lower forecasts in our leakage reduction plan. In August our leakage level was 612 Ml/d. This is 7% higher than the upper forecast level in our leakage reduction plan.

The size and scale of the plan we have in place makes it difficult to pinpoint all the factors responsible for the difference between actual and forecast leakage. However, we’re using the experience gained each month to better understand data in future months and to refine our plans. For August, we’ve identified three factors that we believe affected performance:

  • The spike in visible leaks and large burst mains experienced in July persisted, although at a slightly reduced level.
  • We did not fix as many leaks as we planned. There’s more detail on that here.
  • The proportion of smaller leaks we’ve been detecting and fixing was higher than we’d originally planned, resulting in a lower average leakage reduction benefit per repair than we’ve experienced historically.

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 5,132 leaks in August 2019, which was fewer than planned. This reduction was anticipated following improvements we made to the quality assurance and performance management of our field activities. Improvements include enhanced guidance and training over the requirements for photographs of jobs before and after to reinforce repair teams’ field notes. This has removed some ambiguity when checking job categorisation and provides us with greater insight over the types of jobs that are being completed.

As we expected, these interventions are resulting in a reduction in the number of leaks fixed while the improvements become fully embedded. However, this is a temporary effect and we believe that the additional insight gained will inform us better going forward and will help us to better understand the impact of work mix on our leakage plans.

To increase work volumes, we’re currently recruiting more people to find and fix leaks and making improvements to our planning processes.

Leakage reduction

The graph below shows the estimated volume of water saved from fixing non-visible and customer-side leaks in August 2019, compared with our plan. We repaired leaks which we estimate have prevented leakage equivalent to 22 Ml/d of water in August. This was 9 Ml/d below our plan.

Performance against our plan

For the reasons set out above, we’ve seen a reduction of 15 Ml/d in our monthly leakage level from July to August 2019. You can see our 2019/20 monthly and annual average leakage levels at a glance here. We believe there are several reasons for this.

First, the spike in the number of visible leaks and burst mains we experienced in July persisted into August, although at a slightly reduced level. While this resulted in actual leakage remaining above forecast, it represents a narrowing of the gap between our actual and forecast leakage levels compared to July. We believe this may have been driven, in part, by a significant reduction in levels of demand between July and August, resulting in a reduced need to pump water across our network. This, in turn, leads to a ‘calmer’ network and lower burst and leakage levels.

Second, while we’ve fixed more leaks than our plan for 2019/20, this is providing less benefit than forecast. This is because the mix of leaks being fixed contains a lower proportion of large leaks and more smaller leaks. This results in a smaller average leakage reduction benefit per repair than we’ve seen historically.

In addition, 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.

Based on ongoing analysis, as we noted in earlier reports, we decided to revise down the estimated volume of water saved from our non-visible and customer leak repairs by 16% in total. This revision has been applied from April 2019 to date. While this revision represents a worst-case scenario, we consider it prudent while we continue to analyse and understand the results to date. Although we continue to apply this adjustment, the improvements we have put in place have resulted in the difference between our actual and planned levels of activity reducing in August.

We remain committed to doing all we can to address leakage and to achieve our 2019/20 target. This is a key area of focus for our Executive and Board. Our Leakage Task Force reviews our performance and reduction plans every two weeks to ensure we retain control over the way in which our leakage reduction plan is carried out.

We’ve taken account of actual performance to date and refreshed the remaining months’ work plan to help get us back on track. A suite of initiatives has been introduced to improve leakage detection and productivity of our repair work. We’re increasing our repair and maintenance resources by a further 20 two-person teams. This is a 9% increase and will take our repair and maintenance teams to the highest number we’ve employed since 2015. In the meantime, we maintain a dialogue about our leakage reduction plan with our key stakeholders.

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.

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:

  • Customer 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 leak detection and find harder-to-locate leaks. 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 to record levels. They use data to judge where leaks are occurring and tell repair teams where to dig. As a result, we found significantly more leaks in 2018/19 than the previous year.

This year we’re increasing 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.

Leakage reduction activities

To help us reach our target by 2019/20, 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 biggest risk to us meeting our target in 2019/20 is the weather. Both extreme cold and hot conditions can increase leakage levels. To mitigate this risk, we continue to 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 sufficient to detect and repair the number of leaks required.

The size and scale of the plan in place to achieve our highest level of leakage reduction since privatisation makes it more difficult to fully understand and estimate the water savings made from fixing leaks and the impact of the different work mix. Our level of understanding improves with each month as we build experience and adapt our plans.

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 will become smaller. If this is the case, the number of leaks we’ll need to repair to achieve a given reduction in leakage will have to increase. To address this risk, our quarterly reforecast has increased activity levels and includes the recruitment of 9% more repair teams to help deliver this.

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. The work of the Task Force will further help us refine our plans for 2019/20.

To ensure effective control of the above risks we’ve allocated senior management resource 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.

Leakage reduction - at a glance

Monthly leakage 2019/20

Ml/d Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Monthly leakage level 641 632 613 - - - - - - - - -
Upper forecast monthly leakage 646 614 592 582 571 560 561 574 623 666 662 594
Variance -5 +18 +21
Ml/d Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Monthly leakage level 642 632 613 627 612 - - - - - - -
Upper forecast monthly leakage

646

614 592 582 571 560 561 574 623 666 662 594
Variance -4 +18 +21 +45 +41

Year-to-date average leakage 2019/20

Ml/d Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
YTD average leakage 641 637 630 - - - - - - - - -
Upper forecast YTD average leakage
646 630 618 609 601 594 590 588 592 599 605/td> 604
Variance -5 +7 +12
Ml/d Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
YTD average leakage 642 637 630 629 626 - - - - - - -
Upper forecast YTD average leakage

646

630 618 609 601 594 590 588 592 599 605 604
Variance -4 +7 +12 +20 +25
Note: 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.

How can you help?

Feedback: We would 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.

Conclusion of Ofwat investigation – June 2018

Ofwat has investigated our leakage performance. In order to improve our management of leakage reduction, 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 will come solely from Thames Water’s shareholders and will be reflected in customer bills up to 2025. 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. 

In addition, we appointed John Gilbert 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. Following an internal reorganisation, Tonia Lewis, Head of Regulatory Compliance and Reporting, is taking on the role of Undertakings Compliance Officer with effect from 1 October 2019. We provided our second 6-monthly review of our compliance against our Undertakings to Ofwat on 26 April and the next one is due on 1 November 2019.

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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.