Welsh Water has received £1.5 million in the latest round of Ofwat's Innovation Fund to tackle environmental challenges.
The funds will be used to lead a trailblazing project aimed at reducing carbon in the water treatment process.
The initiative aims to provide benefits across the industry and contribute to a healthier environment.
The not-for-profit company will also collaborate with partners on other projects designed to save both carbon and costs whilst addressing the environment.
At the heart of the proposal is an innovative solution which could save Welsh Water two tonnes of carbon every year by transforming the management of organics during the treatment of drinking water.
This project was one of the winners in a £40 million competition conducted by Ofwat, the economic water regulator.
Welsh Water serves over 1.4 million homes and businesses, standing as the sixth largest of the 23 water companies in England and Wales.
The company treats raw water at their facilities, making it fit to drink which eventually serves over 800 million litres of water every day.
The water treatment process utilises Granular Activated Carbon (GAC) to remove organics from the raw water.
It is an exhaustive process that requires the GAC to undergo thermal regeneration every three years, a method that generates two tonnes of carbon per year and incurs costs of approximately £1m per year.
The new project proposes a distinct approach.
Welsh Water’s innovation team, alongside partners including Swansea University and Panton McLeod, will investigate ways to regenerate GAC on site, reducing both financial costs and carbon footprint.
Paul Gaskin, research and innovation manager of Water Services at Welsh Water, said: "We are excited to be leading this project to investigate transformative ways of regenerating granular activated carbon locally.
"This project is an example of Welsh Water’s commitment to finding innovative solutions to environmental challenges, whilst bringing the wider industry along with us."
Welsh Water is also collaborating with industry partners on other projects including rainwater harvesting, robotic solutions for rising water mains and no-dig leak repair.
Their ongoing commitment to innovation in the sector aligns with the wider vision represented by the Water Breakthrough Challenge.
The challenge, an initiative of Ofwat and run by Challenge Works, Arup and Isle Utilities, aims to foster innovation and collaboration designed to benefit people and the environment, while tackling the biggest challenges facing the water sector.
Speaking on the subject, Helen Campbell, senior director at Ofwat said: "There are big challenges in the water industry that must be solved, some are well known, and others are less so.
"In our fourth Water Breakthrough Challenge we called for solutions with potential to deliver wide-scale, transformational change for customers, society and the environment."
Further details on the Ofwat Innovation Fund and the Water Breakthrough Challenge can be found at waterinnovation.challenges.org/breakthrough4/.
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