Ofwat has confirmed its £200 million innovation fund will be distributed through two annual competitions running from January and April 2021.

The first will be a Dragons Den-style competition for smaller projects called the Innovation in Water Challenge, which will give businesses in the supply chain the chance to become involved.

The main competition is designed to encourage collaboration between water companies and stakeholders in and beyond the sector to pitch large strategic projects.

Following a consultation on previously identified hurdles, Ofwat said a minimum contribution of 10 per cent per bid will be expected from entrants, which may be shared unequally in a joint bid. This should be from borrowing or profits not customer charges.

Ofwat said intellectual property rights (IPR) will be differentiated as “background” and “foreground” with foreground IPR to be made available royalty-free by participants to water companies in England and Wales. Royalties earned by water companies will be proportionately shared with customers, which will apply for joint bids.

On the subject of sharing data, Ofwat ruled it should be freely available for all participants unless it includes personal or secure information.

Ofwat said the fund would complement the government’s Green Recovery initiative and companies will be able to be involved in each and realise opportunities that go beyond the scope of the Green Recovery.

The regulator said it has been “encouraged” to see the ambition and innovation from companies but believes there are “significant untapped opportunities” for more collaboration with the supply chain as well as cross-sector, to identify, trial and adopt transformative technologies and practices.

The innovation fund was announced as part of the PR19 final determinations to stimulate the sector with £200 million of funding available over the five years of AMP7.

Ofwat will be tendering for a partner to help run the competitions in the autumn ahead of the first Innovation in Water challenge running between January-March and the main competition running from April.

John Russell, senior director at Ofwat said: “By emphasising the need for stronger collaboration and partnership across the sector and beyond, we believe innovation funding and the innovation competition will help accelerate change. I look forward to appointing an innovation fund partner to help us with the design, implementation and ongoing monitoring and administration of the innovation competition and make a real difference for customers and the environment for years to come.”