The aging water infrastructure across many regions has become an increasing concern for policymakers and utility operators. One of the most pressing consequences of aging networks is water loss, whether due to leaks, pipe bursts, structural failures, or inefficiencies in metering systems. These losses, known as Non-Revenue Water (NRW), include both physical losses (actual water lost from leaks) and apparent losses (resulting from meter inaccuracies, unmeasured consumption, or unauthorized use).
The scale of NRW varies significantly across countries. According to the recent report Estimating the Investment Deficit in the Urban Water Cycle in Spain (PwC, May 2024), NRW in Spain accounted for 23% of total water supplied, amounting to nearly 1,000 cubic hectometers per year. Across Europe, the disparity is evident, ranging from 5% in the Netherlands to 41% in Italy. These figures underscore the urgent need for effective regulation and proactive measures to reduce leakage and ensure the sustainability of water resources.
A model of leadership: The UK’s Regulatory Framework
Among the nations tackling water losses, the United Kingdom stands out for its proactive regulatory approach. Ofwat, the economic regulator for England and Wales, has taken decisive action by setting clear targets for leakage reduction.
Between 2020 and 2025 (AMP7 period), water companies are required to reduce leakage by 16% compared to 2017-18 levels. This reduction is equivalent to saving enough water to supply major cities such as Cardiff, Birmingham, Leeds, Bristol, Sheffield, and Liverpool combined. Looking further ahead, the goal is to halve leakage by 2050, reflecting a strong industry-wide commitment to water conservation.
A key factor behind the UK’s success in driving leakage reductions is the strict accountability system imposed on water companies. If a company fails to meet its leakage target, it must return money to customers. This direct financial consequence has encouraged utilities to invest in advanced leak detection technologies, remote monitoring systems, and predictive analytics, helping to modernize infrastructure and improve efficiency.
Spain’s structured approach: A focus on standardization
While the UK’s model prioritizes financial accountability and flexibility in how companies meet targets, Spain has taken a different approach, emphasizing standardization and structured reporting.
Royal Decree 3/2023, published on January 10, 2023, introduces the Structural Leakage Index (Índice de Fugas Estructural – IFE), a mandatory reporting framework requiring utilities to monitor and report water losses. This regulation applies to utilities supplying more than 100 cubic meters of water per day, with the first reports due by March 31, 2025, based on 2024 data. The data will then be consolidated and submitted to the European Commission by January 2026, contributing to an EU-wide effort to define leakage thresholds.
Unlike the UK’s approach, which allows companies to implement their own strategies to meet regulatory targets, Spain’s framework establishes a unified methodology for calculating and reporting leakage levels. This ensures transparency and comparability across utilities, making it easier for policymakers to track progress and identify areas for improvement.
Why leadership matters in water regulation
The differences between the UK and Spanish approaches highlight an important lesson: strong leadership and commitment from regulators drive real change. In the UK, Ofwat’s clear targets, financial incentives, and focus on innovation have made a measurable impact on leakage levels. In Spain, the structured approach is laying the foundation for long-term accountability and data-driven decision-making.
Both models demonstrate that when authorities set clear goals, enforce regulations, and promote investment in technology, water utilities respond with greater efficiency and improved performance.
Looking ahead: A global effort in water efficiency
As water scarcity becomes a more pressing global issue, countries must continue refining their regulatory frameworks to promote efficiency, accountability, and innovation. The UK’s leadership in leakage reduction and Spain’s structured reporting model both offer valuable insights into how regulation can drive positive change.
At Aganova, we support utilities with cutting-edge pipeline assessment and leak detection solutions, helping them meet regulatory requirements and optimize water resource management. Strong leadership and clear regulations can transform the future of water efficiency—now is the time for utilities to act.
