Our leakage performance

Headlines for June 2019

  • Our average leakage level for June was 613 Ml/d, which is 21 Ml/d higher than our upper forecast leakage level for the month.
  • We completed 6,011 leak repairs in the month, which is 3% more than our plan.
  • We repaired leaks which we estimate have prevented leakage equivalent to 28 Ml/d of water in June, which is 6 Ml/d less than our plan.

What is leakage?

Leakage is the amount of water lost from pipes across the water network. We supply almost a 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.

How do we measure leakage?

To calculate our leakage figure, we employ an industry-standard method which all water companies use. 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.

What’s our target and how are we doing?

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.

Our actual levels for the last 4 years can be compared with our targets in the table below. The results have been externally audited and confirmed.

  2015/16 2016/17 2017/18 2018/19 2019/20
Annual leakage target (Ml/d) 649 630 620 612 606
Actual annual leakage level (Ml/d) 642 677 TBC - -
  2015/16 2016/17 2017/18 2018/19 2019/20
Annual leakage target (Ml/d) 649 630 620 612 606
Actual annual leakage level (Ml/d) 642 677 695 690 -

We remain committed to doing all we can to hit our target of 606 Ml/d in 2019/20. Our plans include the amount of work we need to do to deliver this target. While we’re doing everything 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 planned activity at this level. When taking these risks into account, we believe 636 Ml/d is a more realistic leakage forecast for 2019/20.

Despite the above point, leakage reduction remains one of our top priorities. We continue to strive to deliver our 606 Ml/d target and we keep stakeholders updated about our leakage performance and forecasts.

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.

Our June 2019 results

We've agreed with Ofwat that, as part of reporting our monthly results, we will provide details on:

  • Leakage level - the estimated amount of water lost each day
  • Leaks fixed - the number of leaks we find and fix
  • Leakage reduction - the estimated volumes of water saved from leaks found and fixed

Leakage level 

The graph below shows the actual amount of water lost from our network in June 2019, compared with the upper and lower forecasts in our leakage reduction plan. In June our leakage level was 613 Ml/d. This is 21 Ml/d higher than the upper forecast level in our leakage reduction plan.

We’re working hard to understand this difference and believe that two main factors are responsible. First, the impact on leakage that weather patterns have had (this is further explained here). Second, the volume of water saved from fixing leaks appears to be less than we’ve experienced historically. These two factors represent risks to our plan and are further explained later in this report.

Leaks performance graph of water lost for March 2019

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.

In June 2019 53% of the leaks we fixed were non-visible and had to be detected by our teams and 21% were visible and were reported by the public. We prioritise fixing visible leaks in response to customer expectations and fix them on our biggest pipes first wherever possible. The remaining 26% were customer leaks, where we work with our customers to repair their leaks free of charge.

The graph below shows how many leaks we fixed in June 2019. We averaged 1,503 each week, and this means we’ve completed more work than our original plan every month since January 2018. We’ve achieved this higher figure by recruiting more people to find and fix leaks, making improvements to our planning processes and using state of the art leak detection equipment to help us find leaks.

Leakage reduction

The graph below shows the estimated volume of water saved from fixing non-visible and customer-side leaks in June 2019, compared with our plan. We repaired leaks which we estimate have prevented leakage equivalent to 28 Ml/d of water in June, which was 6 Ml/d behind our plan that aims to take leakage below its lowest ever levels by March 2020.

Our leak reduction plan

Performance against our plan

We’ve seen leakage reduce each month from April to June 2019, which is in line with the trend we expect for this time of year. Our monthly and annual average leakage levels are shown in the tables below.

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 641 632 613 - - - - - - - - -
Upper forecast monthly leakage 646 614 592 582 571 560 561 574 623 666 662 594
Variance -5 +18 +21

Annual average leakage 2019-20

Ml/d Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Annual average leakage 641 637 630 - - - - - - - - -
Upper forecast annual 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
Annual average leakage 641 637 630 - - - - - - - - -
Upper forecast annual average leakage 646 630 618 609 601 594 590 588 592 599 605 604
Variance -5 +7 +12
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. We have uplifted the leakage figures for April and May by 4 Ml/d as a result of a correction we made in June to the calculation of demand in one of our areas.

The reduction in leakage from April to June 2019 is not as large as we’d expected and we believe two main factors are responsible.

The first relates to the effect water temperature has on leakage. Our leakage reduction plan assumes that water temperatures increase through April, May and June, which causes pipes to expand and the volume of leakage from them to reduce. In reality, due to the mild winter in 2018/19, there was less weather-related benefit to be gained in April, May and June 2019 than expected.

The second factor is that while we’re continuing to fix more leaks than our plan, this is providing less benefit than forecast. We have a number of activities in place to address this, including understanding the need for additional resources. In the meantime, based on ongoing analysis, we decided to revise down the estimated volume of water saved from our non-visible and customer leak repairs by 16% in total. While this is a worst-case scenario, we feel it’s prudent while we await the results of ongoing checks. As a result, our estimated Ml/d volume of leakage reduction from these activities is lower than forecast (as shown in the graph above), even though we’re completing more repair jobs.

We remain committed to doing all we can to address leakage and to achieve our 2019/20 target. 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. In the meantime, we 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:

  • 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 26,000 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:

  • Addressing ‘Dead Zones’ - We’re mapping zones where it’s difficult to hear leaks using traditional techniques. We’ve also started a project to look in detail at 50 km of dead zone so we can find the best solutions to them.
  • Using 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 hear.
  • Improving identification of customer leaks - Leaks on customers’ pipes make up a significant proportion of our leakage, but the programme for detecting and repairing them often generates false alarms and unnecessary customer calls. We’re trialling a device to see if its method of quantifying customer leaks gives lower false alarms.

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. This work enables us to review the resource requirements and ensure they are sufficient to repair the number of leaks required.

Another key risk relates to our understanding and estimate of the water savings made from fixing leaks as we work to reduce leakage below our all-time lowest level. This benefit appears to be lower than we have experienced historically. We are working to address this issue in a number of ways. These include enhanced performance management of our new leakage detection contracts, improved data capture and analysis of leaks fixed, and increased job auditing.

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.

Did you know?

Well over half (55%) of Thames Water’s pipes are under busy London streets.

To find out more about this and what it means for leakage reduction, please see the conversation thread on our community platform. We’ve created and shared an infographic with you, which shows why leakage is such a challenge and how we’re already working to fix it.

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. 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.