Digital Twin Water Distribution Market Report 2026

The digital twin water distribution market size has grown rapidly in recent years. It will grow from $1.77 billion in 2025 to $2.06 billion in 2026 at a compound annual growth rate (CAGR) of 16.4%. The growth in the historic period can be attributed to increasing urban water demand, aging water infrastructure networks, early deployment of smart water meters, rising non-revenue water losses, availability of hydraulic modeling software.

The digital twin water distribution market size is expected to see rapid growth in the next few years. It will grow to $3.76 billion in 2030 at a compound annual growth rate (CAGR) of 16.2%. The growth in the forecast period can be attributed to increasing investments in smart water management, rising focus on water conservation, expansion of digital infrastructure in utilities, growing adoption of ai-based predictive maintenance, increasing regulatory pressure for efficient water distribution. Major trends in the forecast period include increasing adoption of real-time water network digital twins, rising use of predictive leak detection models, growing integration of iot sensors across distribution networks, expansion of cloud-based water analytics platforms, enhanced focus on demand forecasting accuracy.

The growing demand for efficient water management is expected to drive the expansion of the digital twin water distribution market in the coming years. Water management refers to the planned use and conservation of water resources to maximize availability, reduce waste, and ensure sustainability for both human and environmental needs. This demand is rising largely due to climate change, which is intensifying water scarcity, variability, and extreme weather conditions. Digital twin water distribution supports efficient water management by enabling real-time monitoring, predictive analytics, and optimized resource utilization, thereby ensuring reliable and sustainable water supply systems. For example, in November 2025, the Australian Bureau of Statistics, an Australia-based government agency, reported that in 2023-24, total national water consumption by industries and households increased from 15,258 GL to 17,223 GL, representing a 12.9% rise compared to 2022-23. Consequently, the increasing demand for efficient water management is fueling the growth of the digital twin water distribution market.

Leading companies in the digital twin water distribution market are focusing on forming strategic collaborations to improve operational efficiency, optimize resource use, and speed up the adoption of advanced water management systems. Strategic collaborations involve partnerships between two or more organizations that combine resources, expertise, or technologies to achieve common goals, foster innovation, and deliver mutual benefits. For instance, in April 2024, Arcadis NV, a design and engineering firm based in the Netherlands, partnered with Houston Public Works, a municipal government agency in the US, to create a digital twin and update Houston’s water distribution model. This project aims to improve the current planning model by offering detailed management of localized issues, such as low water pressure at the individual customer level. It enhances the monitoring and management of water hydraulics and quality through an intelligent water framework powered by artificial intelligence, ensuring safe delivery and supporting the city’s capital improvement efforts. This digital twin will assist in optimizing decision-making, meeting Houston’s growing water demands caused by population growth, and fostering a sustainable, efficient water network.

In March 2025, Air Selangor, a Malaysian water services provider, partnered with Schneider Electric SE to advance water management through digital twin technology. This collaboration seeks to optimize water distribution, reduce operational risks, and promote sustainable resource management using digital twin solutions. Schneider Electric SE is a French company specializing in energy management and industrial automation.

Major companies operating in the digital twin water distribution market are Siemens AG, AVEVA Group plc, Schneider Electric SE, Bentley Systems Incorporated, IBM Corporation, Xylem Inc, Suez S.A, Innovyze Inc, Ayyeka Technologies Ltd, TaKaDu Ltd, Envirosuite Limited, Itron Inc, Trimble Inc, General Electric Company, Honeywell International Inc, Aquasuite (Royal HaskoningDHV), Idrica S.L, Optiqua Technologies Pte Ltd, Grundfos Holding A/S, Veolia Environnement S.A.

North America was the largest region in the digital twin water distribution market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the digital twin water distribution market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the digital twin water distribution market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The digital twin for water distribution market includes revenues earned by entities by providing services such as digital twin data migration, cross-sector collaboration and integration, sensor network reconfiguration, digital twin model calibration, and multi-utility digital twin consolidation services. The market value includes the value of related goods sold by the service provider or included within the service offering. The digital twin for water distribution market also includes sales of mobile digital twin monitoring apps, energy optimization add-on tools, three-dimensional (3D) audio spatialization tools, augmented reality (AR) visualization tools, and digital twin-enabled hydraulic modelling kits. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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