Post: Why energy is the hidden opportunity in the water sector

Why energy is the hidden opportunity in the water sector

With a £104B investment programme approved for 2025-30, AMP8 represents the most ambitious period of water sector reform since privatisation. Regulators want more resilient infrastructure, faster decarbonisation, and better customer value. While much of the AMP8 debate focuses on capital investment the operational energy challenge for the sector is significant.

An underappreciated cost driver

Water and wastewater services are among the most energy-intensive operations in local infrastructure. Pumping, aeration, disinfection, and distribution require continuous power, and at large treatment works, electricity can account for 20%-40% of total operating costs. When combined with volatile wholesale prices, grid reliability risks, tightening net zero obligations, energy management becomes more than a procurement function.

But energy planning has traditionally been siloed: operational teams manage operating schedules; procurement manages electricity contracts and sustainability teams track carbon and no single team is responsible for connecting the dots. That’s the gap that GridBeyond’s digital twin technology is designed to fill.

What a digital twin does in the water sector

A digital twin is a continuously updated virtual model of a physical asset or system. In a water sector context, it replicates the behaviour of pumping stations, reservoirs, treatment works and distribution networks, incorporating live sensor data, energy pricing, production targets and demand forecasts simultaneously. The practical result is a platform that can answer a genuinely valuable operational questions in real time: given where we are now, what’s the optimal way to run these assets over the next 24 to 72 hours, balancing energy costs, service targets and network constraints?

GridBeyond’s FlexPilot platform forecasts electricity prices every five minutes using over 700 live models, co-optimises pump scheduling and load profiles against reservoir levels and pressure constraints, and can dispatch instructions directly to existing SCADA systems either as recommendations or fully automated commands.

Turning physical storage into a virtual battery

Water infrastructure already has storage: reservoirs hold water; wet wells buffer flows; and distribution networks absorb short-term pressure variation. By running pumps when electricity is cheap and drawing down on these types of “storage assets” during peak-price periods, water companies can achieve significant cost reductions without capital investment in physical batteries.

The bigger picture

AMP8 cannot be delivered on capital alone. The sector needs smarter operational management of existing and future assets. Energy, managed intelligently, is one of the most accessible levers available and increasingly, one regulators will expect companies to pull. The water companies that treat energy as a strategic capability rather than a fixed cost will be better placed to meet AMP8’s demands, protect customer bills, and build a credible path to net zero.

The combination of the Government’s water policy paper, Ofwat’s AMP8 determinations and the RAPID programme creates both the obligation and the opportunity for water companies to fundamentally transform how they manage energy.

Whitepaper | Delivering resilience, efficiency and decarbonisation in the AMP8 era

In this white paper we explore the policy context driving the need for intelligent energy management in the water sector, explain how digital twin technology works in practice, and how GridBeyond has delivered for water utilities in the UK and internationally.

Learn more