Explainer: Water security & desalination — a practical primer for teams that need to ship

In 2024, the UK faced its most severe water stress events in over a decade, with 14 water companies reporting supply-demand deficits exceeding 15% during peak summer months. The Environment Agency estimates that by 2050, England alone could face a water supply shortfall of approximately 4 billion litres per day—equivalent to the daily consumption of 27 million people. For teams responsible for procurement, infrastructure resilience, and sustainability strategy, understanding water security is no longer optional: it is an operational imperative that demands immediate attention and systematic hardening of supply systems.

Why It Matters

Water security represents one of the most pressing yet underappreciated dimensions of the UK's climate adaptation challenge. Unlike energy infrastructure, which has benefited from decades of diversification investment, water systems remain heavily dependent on rainfall patterns that are becoming increasingly volatile. The 2024 State of the Water Industry report from Ofwat revealed that non-revenue water losses—primarily through leakage—still account for approximately 2.4 billion litres daily across England and Wales, representing both a financial drain and a systemic vulnerability.

The significance extends beyond supply availability. In 2025, the UK's National Cyber Security Centre (NCSC) elevated water infrastructure to "Tier 1" critical national infrastructure status following documented reconnaissance activities targeting supervisory control and data acquisition (SCADA) systems at three major treatment facilities. This designation reflects growing recognition that water security encompasses not merely hydrological sufficiency but also protection against physical sabotage, cyber intrusion, and supply chain disruption.

From an economic perspective, the water sector contributes approximately £12 billion annually to the UK economy whilst employing over 30,000 people directly. Disruptions carry cascading consequences: the 2018 "Beast from the East" cold snap caused pipe bursts affecting 200,000 properties and resulted in compensation payments exceeding £67 million. Climate projections indicate that such extreme weather events—both cold snaps causing infrastructure damage and droughts straining supply—will increase in frequency by 30-40% by 2040.

Desalination has emerged as a strategic option within this context. Thames Water's Beckton Desalination Plant, operational since 2010, can produce 150 million litres daily—enough to supply 400,000 households during drought conditions. However, desalination remains energy-intensive, with current reverse osmosis technologies requiring 3-4 kWh per cubic metre of freshwater produced. The carbon implications are significant unless paired with renewable energy sources, presenting teams with complex trade-offs between water security and decarbonisation objectives.

Key Concepts

Water Security: The capacity to reliably access sufficient quantities of acceptable-quality water for sustaining livelihoods, human well-being, and socio-economic development. In operational terms, water security encompasses source diversification, treatment capacity, distribution network integrity, and demand management capabilities. The UN-Water framework identifies four dimensions: water availability, water quality, water-related risks, and institutional capacity to manage water resources.

Critical Infrastructure Protection: The systematic identification, assessment, and mitigation of threats to essential services. For water systems, this includes physical assets (reservoirs, treatment plants, pumping stations), digital systems (SCADA, telemetry networks, customer databases), and supply chains (treatment chemicals, replacement components, specialist contractors). The UK's Centre for the Protection of National Infrastructure (CPNI) classifies water as essential infrastructure requiring enhanced security protocols.

Resilience: The ability of water systems to anticipate, prepare for, respond to, and recover from disruptions whilst maintaining continuous service delivery. Resilience differs from redundancy: whereas redundancy involves duplicate capacity, resilience encompasses adaptive capabilities including demand reduction protocols, alternative supply activation, and accelerated repair capabilities. The Ofwat resilience framework measures this across three dimensions: corporate, financial, and operational resilience.

Heat Stress: The combined effects of elevated temperatures and reduced precipitation on water supply systems. Heat stress manifests through increased evaporation from reservoirs (typically 5-8% per degree Celsius above baseline), elevated consumer demand (summer peaks can exceed winter averages by 40-50%), and accelerated biological growth in distribution networks requiring enhanced treatment. The Met Office projects that UK summers exceeding 40°C will occur with increasing regularity by 2035.

Flood Risk: Paradoxically, flood events can severely compromise water security by contaminating sources, damaging treatment infrastructure, and overwhelming drainage systems. The 2007 Gloucestershire floods rendered Mythe Water Treatment Works inoperable for 17 days, leaving 350,000 people without mains water. Flood risk management for water infrastructure requires elevation of critical equipment, flood-resilient construction, and pre-positioned recovery resources.

Additionality: In the context of water investment, additionality refers to capacity or capability that would not exist without specific intervention. When evaluating desalination or water recycling projects, procurement teams must assess whether proposed solutions deliver genuine additional supply versus merely displacing existing sources. Genuine additionality is essential for addressing the projected supply-demand gap rather than simply redistributing existing resources.

What's Working and What Isn't

What's Working

Integrated Water Resource Management Planning: Water Resource Management Plans (WRMPs), mandated on 25-year cycles by the Environment Agency, have driven systematic assessment of supply-demand balances across all English and Welsh water companies. The 2024 planning round required companies to demonstrate resilience against 1-in-500-year drought scenarios—a significant enhancement from previous 1-in-200-year requirements. This planning discipline has identified approximately £7.2 billion of necessary investment through 2030 and forced explicit prioritisation between leakage reduction, demand management, new supplies, and inter-company transfers.

Smart Metering and Demand Management: Companies achieving high smart meter penetration—notably Southern Water at 87% and Thames Water at 72%—have documented consumption reductions of 12-15% compared to traditionally metered households. The behavioural effects extend beyond billing accuracy: real-time consumption visibility enables householders to identify leaks rapidly and modify water-intensive behaviours. Affinity Water's "save a little water" campaign, combining smart metering with targeted communications, achieved a 7% per capita consumption reduction between 2020 and 2024.

Strategic Water Transfers: The proposed Strategic Resource Options (SROs), including the Severn-Thames Transfer and Grand Union Canal scheme, represent genuinely transformational infrastructure. The Severn-Thames Transfer, currently in planning, would enable movement of up to 500 million litres daily from the relatively water-rich Severn catchment to the stressed Thames catchment. This inter-regional approach addresses the fundamental geographic mismatch between water availability (concentrated in the north and west) and demand concentration (in the south and east).

What Isn't Working

Leakage Reduction Performance: Despite regulatory targets and substantial investment, total leakage across England and Wales has remained stubbornly high at approximately 2.4 billion litres daily—roughly 20% of water entering supply. Several companies, including South East Water and Southern Water, have failed to meet their leakage reduction commitments in multiple consecutive years. The fundamental challenge is that much distribution infrastructure dates from the Victorian era, with replacement rates of approximately 0.2% annually implying complete renewal would require 500 years.

Cybersecurity Maturity: A 2024 assessment by the NCSC found that only 34% of UK water companies met the Cyber Assessment Framework (CAF) baseline standards, with particular weaknesses in operational technology (OT) network segmentation and supply chain security. Legacy SCADA systems—some operating on unsupported Windows XP platforms—present persistent vulnerabilities. The sector's fragmented ownership structure complicates coordinated defence, as attack surface mapping requires cooperation across 17 separate companies with varying security capabilities.

Regulatory Incentive Alignment: The current price review methodology (PR24) has been criticised for inadequately incentivising long-term resilience investment. Companies face short-term pressures to minimise capital expenditure to maintain returns, whilst resilience benefits accrue over decades. The consequence is systematic underinvestment in redundancy and hardening measures that would pay dividends during extreme events but appear inefficient during normal operations. Ofwat's totex approach has partially addressed this but still favours operational expenditure over capital investment in many scenarios.

Key Players

Established Leaders

Thames Water: The UK's largest water company, serving 15 million customers across London and the Thames Valley. Despite recent financial challenges, Thames Water operates the Beckton Desalination Plant—the UK's only large-scale municipal desalination facility—and leads strategic planning for the Thames Tideway Tunnel.

Severn Trent: A FTSE 100 company serving 8 million customers across the Midlands. Severn Trent has achieved industry-leading leakage reduction performance and operates advanced analytics capabilities for network optimisation, with a £12 billion investment programme through 2030.

United Utilities: Serving 7 million customers across the North West, United Utilities manages the Haweswater and Thirlmere reservoirs in the Lake District. The company has pioneered catchment management approaches and operates the UK's largest wastewater treatment facility at Davyhulme.

Veolia Water Technologies: A global leader in water treatment solutions with significant UK operations. Veolia provides design, build, and operate services for desalination and water recycling facilities, including advanced membrane technologies achieving energy consumption below 3 kWh per cubic metre.

Jacobs Engineering: A major infrastructure consultancy delivering water security projects across the UK. Jacobs has led feasibility studies for Strategic Resource Options and provides programme management for capital investment programmes exceeding £500 million annually.

Emerging Startups

Arvia Technology: A Manchester-based company commercialising Nyex technology for micropollutant removal. Arvia's electrochemical systems address emerging contaminants including PFAS compounds that conventional treatment cannot remove, with installations at UK water company sites.

Isle Utilities: An innovation accelerator connecting water companies with technology providers. Isle operates the Technology Approval Group (TAG), which has evaluated over 400 emerging technologies for UK water sector application since 2015.

Rezatec: A Harwell-based geospatial AI company providing satellite-based leak detection and asset condition monitoring. Rezatec's platform enables identification of pipeline vulnerabilities before failures occur, with documented improvements in leakage targeting efficiency.

Fido Tech: Developing acoustic monitoring solutions for real-time leak detection. Fido's permanent sensors, deployed across pipe networks, reduce leak detection times from weeks to hours, enabling rapid repair response.

Hydrosense: A spin-out from the University of Sheffield developing real-time pathogen monitoring for water distribution systems. Hydrosense technology enables detection of bacterial contamination within minutes rather than days required for conventional culture-based methods.

Key Investors & Funders

UK Infrastructure Bank: Established in 2021 with £22 billion of lending capacity, UKIB has identified water resilience as a priority sector. Recent investments include support for the Hampshire Water Transfer scheme and feasibility funding for desalination expansion.

Macquarie Asset Management: One of the largest infrastructure investors globally, with significant holdings in UK water including a stake in Southern Water. Macquarie has committed to enhanced resilience investment as a condition of regulatory approval for acquisitions.

Ofwat Innovation Fund: A regulatory initiative providing £200 million over 2020-2025 for innovation projects addressing sector challenges. Funded projects include smart network pilots, nature-based solutions, and customer engagement technologies.

Environment Agency Water Resources Grant Programme: Providing capital support for strategic water resource infrastructure. The programme has allocated £45 million for inter-regional transfer feasibility studies and environmental impact assessments.

Anglian Water Strategic Pipeline: A £1.2 billion infrastructure programme creating 500 kilometres of new strategic mains across Eastern England. Funded through a combination of customer bills and green bond issuance, the pipeline demonstrates viable financing models for resilience infrastructure.

Examples

Thames Water Beckton Desalination Plant, East London: Commissioned in 2010 at a capital cost of £270 million, Beckton represents the UK's first large-scale desalination facility. The plant draws brackish water from the Thames estuary, applying reverse osmosis treatment to produce up to 150 million litres of drinking water daily. During the 2022 drought, Beckton operated at full capacity for 47 consecutive days, demonstrating its value as a drought-resilient supply source. Energy consumption averages 3.4 kWh per cubic metre, with plans to integrate solar generation to reduce carbon intensity by 40% by 2027.

Severn Trent Integrated Network Management, Midlands: Since 2018, Severn Trent has deployed 35,000 acoustic sensors across its 46,000-kilometre pipe network, combined with AI-powered analytics to predict pipe failures before they occur. The system has reduced reactive repairs by 23% and cut average leak repair times from 14 days to 4 days. Customer minutes lost to supply interruptions fell by 31% between 2019 and 2024, whilst the company has exceeded leakage reduction targets for five consecutive years.

Southern Water Water Recycling Scheme, Hampshire: Currently under construction with completion scheduled for 2031, this £600 million project will recycle treated wastewater to augment river flows supporting abstraction for drinking water treatment. The scheme will provide 75 million litres daily of additional supply—equivalent to the needs of 250,000 households—whilst maintaining stringent environmental flows in the River Itchen. Advanced treatment including ultrafiltration, reverse osmosis, and advanced oxidation ensures water quality exceeds drinking water standards.

Action Checklist

• Conduct a water supply chain mapping exercise identifying all water-dependent operations, including cooling systems, manufacturing processes, and sanitary facilities
• Review your organisation's position in water company Water Resource Management Plans to understand projected supply-demand balances in your operating areas through 2050
• Assess cybersecurity posture of any water treatment or recycling systems operated on-site, ensuring compliance with the NIS Regulations and CAF framework
• Evaluate water efficiency opportunities using smart sub-metering to identify high-consumption processes and leak detection across your estate
• Engage with your water company on drought response protocols, understanding trigger points for restrictions and available alternative supply arrangements
• Develop on-site water storage capacity where practical, providing buffer against short-term supply interruptions of 24-48 hours
• Review insurance coverage for water-related business interruption, ensuring policies reflect actual exposure to supply disruptions
• Incorporate water security criteria into site selection for new facilities, prioritising locations with diversified water sources and modern infrastructure
• Establish relationships with alternative water suppliers, including tankered water providers and private borehole operators, for emergency situations
• Monitor regulatory developments including PR24 outcomes and Environment Agency abstraction reforms that may affect water availability and pricing

FAQ

Q: How vulnerable is UK water infrastructure to cyber attacks, and what should organisations do to prepare? A: UK water infrastructure faces moderate-to-high cyber risk. The 2024 NCSC assessment identified significant vulnerabilities in operational technology systems, with 66% of companies falling below baseline cybersecurity standards. For organisations dependent on water supply, preparation should include understanding your water company's cyber resilience posture (available through regulatory submissions), developing contingency plans for supply disruptions lasting 48-72 hours, and ensuring any on-site water systems are isolated from corporate IT networks. Critical facilities should consider on-site storage sufficient for essential operations during extended outages.

Q: Is desalination economically viable for the UK given our relatively high rainfall compared to arid regions? A: Desalination is economically viable in specific contexts, particularly for drought resilience in water-stressed regions of Southern and Eastern England. Current costs of approximately £1-1.50 per cubic metre are higher than conventional surface water treatment (£0.30-0.50 per cubic metre) but comparable to long-distance transfer options. The economic case rests on resilience value rather than baseload supply: desalination provides reliable output regardless of rainfall, making it valuable insurance against drought conditions projected to intensify with climate change. Energy costs and carbon intensity remain concerns requiring integration with renewable energy sources.

Q: What role will water recycling play in future UK water supplies, and is it safe? A: Water recycling is expected to contribute 10-15% of new water supply by 2050, primarily through indirect potable reuse where treated wastewater augments surface water sources. Multiple treatment barriers—including biological treatment, ultrafiltration, reverse osmosis, and advanced oxidation—ensure water quality exceeding drinking water standards. Singapore's NEWater system has demonstrated the safety and public acceptability of indirect potable reuse since 2003. UK projects currently in development, including Southern Water's Hampshire scheme, will provide operational evidence within UK regulatory and cultural contexts.

Q: How should procurement teams evaluate water security when selecting suppliers or sites? A: Procurement evaluation should incorporate water stress mapping, infrastructure age and condition, and regulatory performance of relevant water companies. The Environment Agency's Water Stressed Areas Classification identifies regions facing greatest pressure. Company-level performance data, including leakage rates, supply interruption minutes, and Water Resource Management Plan projections, is available through Ofwat's Discover Water platform. For critical operations, site visits to assess local infrastructure and discussions with water company business teams can reveal vulnerabilities not captured in published data.

Q: What financial mechanisms exist to support water security investments? A: Multiple funding sources are available for water security projects. The UK Infrastructure Bank provides concessional finance for strategic infrastructure. The Environment Agency offers grants for strategic water resource studies. Private investment in water companies is incentivised through the regulatory price review process, with allowed returns currently set at approximately 4% real. For commercial operations, Enhanced Capital Allowances may apply to water-efficient equipment. Green bonds have emerged as significant funding sources, with Anglian Water and Thames Water both issuing sustainability-linked debt with water efficiency targets.

Sources

• Environment Agency (2024). "Water Resources Planning Guideline: Supplementary Guidance on Environmental Destination." Bristol: Environment Agency Publications.
• Ofwat (2024). "State of the Water Industry 2024." Birmingham: Water Services Regulation Authority.
• National Cyber Security Centre (2024). "Cyber Assessment Framework: Water Sector Profile." London: NCSC.
• Water UK (2024). "Net Zero 2030 Routemap: Water Sector Progress Report." London: Water UK.
• Met Office (2024). "UK Climate Projections: Water Resources Summary." Exeter: Met Office Hadley Centre.
• House of Commons Environment, Food and Rural Affairs Committee (2024). "Water Security: Third Report of Session 2024-25." London: The Stationery Office.
• Infrastructure and Projects Authority (2024). "National Infrastructure Assessment: Water Sector Analysis." London: HM Treasury.