Digital Twin Water Distribution Market Report 2025

The digital twin water distribution market size has grown rapidly in recent years. It will grow from $1.51 billion in 2024 to $1.77 billion in 2025 at a compound annual growth rate (CAGR) of 16.7%. The increase during the historic period is due to growing urban water demand, a stronger focus on interoperability, higher investments in water infrastructure, the spread of smart city projects, and heightened regulatory attention on water conservation.

The digital twin water distribution market size is expected to see rapid growth in the next few years. It will grow to $3.24 billion in 2029 at a compound annual growth rate (CAGR) of 16.4%. The growth expected during the forecast period is driven by a rising demand for predictive maintenance solutions, the expansion of public-private partnerships in water projects, increased use of real-time data analytics, and a growing need for efficient water management solutions. Key trends for this period include advancements in real-time water quality monitoring, progress in cloud-based water management platforms, greater investment in research and development, improvements in sensor integration, and innovations in virtual and augmented reality technologies.

The growing need for efficient water management is expected to drive the expansion of the digital twin water distribution market in the future. Water management involves the strategic use and preservation of water resources to maximize availability, reduce waste, and ensure sustainability for both human and environmental purposes. This demand is rising due to climate change, which worsens water scarcity, variability, and extreme weather conditions. Digital twin water distribution supports effective water management by providing real-time monitoring, predictive analytics, and optimized resource use, thereby ensuring sustainable and reliable water supply systems. For example, according to the Australian Bureau of Statistics in October 2023, water consumption by industries and households in Australia reached 13,449 gigalitres (GL) in 2021-2022, up from 13,415 GL in 2020-21. Hence, the increasing need for efficient water management is propelling 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 players in the digital twin water distribution market are Siemens AG, Schneider Electric SE, GE Vernova Inc., ABB Ltd., Xylem Inc., Hexagon AB, Stantec Inc., Itron Inc., Bentley Systems Inc., Qatium S.L., DHI Group Inc., Vassar Labs IT Solutions Private Limited, Ayyeka Technologies Ltd., Idrica S.L., Trinnex LLC, Envirosuite Limited, CIMCON Digital Inc., Innovyze Inc., TaKaDu Ltd., and Waltero Technologies Inc.

North America was the largest region in the digital twin water distribution market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in digital twin for water distribution report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the digital twin for water distribution market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the utilities sector, particularly in power generation, grid infrastructure, and renewable energy projects. Higher duties on imported equipment such as turbines, transformers, solar panels, and battery storage systems have increased capital and operational costs for utility providers, forcing them to reconsider project timelines or pass on expenses to consumers through higher energy rates. The water and waste management segments are also affected, with tariffs driving up the cost of essential machinery, piping, and treatment technologies. Additionally, retaliatory tariffs have disrupted global supply chains for critical raw materials like rare earth metals used in clean energy technologies, further complicating the transition to sustainable energy sources. The sector must now prioritize domestic sourcing, digitalization, and efficiency-driven innovations to manage escalating costs while ensuring energy security and regulatory compliance.

A digital twin for water distribution is an extremely detailed virtual model of a water network, which encompasses pipelines, pumps, valves, and reservoirs. This model continuously mirrors the real-time condition and functioning of the actual physical system. By combining sensor data, Internet of Things (IoT) technology, and predictive analytics, it enables the monitoring, analysis, and optimization of water flow and overall system performance. This approach enhances efficiency, identifies leaks, forecasts maintenance requirements, and supports dependable and sustainable water distribution.

The primary elements of a digital twin for water distribution include software, hardware, and services. Software consists of digital applications that simulate and evaluate water distribution systems in real time. These programs can be implemented on-premises or via cloud platforms and are used for purposes such as managing water networks, detecting and preventing leaks, overseeing assets, forecasting demand, among others. The main users of these technologies include municipal authorities, industrial entities, commercial organizations, and more.

The digital twin water distribution market research report is one of a series of new reports that provides digital twin water distribution market statistics, including digital twin water distribution industry global market size, regional shares, competitors with a digital twin water distribution market share, detailed digital twin water distribution market segments, market trends and opportunities, and any further data you may need to thrive in the digital twin water distribution industry. This digital twin water distribution market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

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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