Implementation and diffusion of innovative water infrastructures: obstacles, stakeholder networks and strategic opportunities for utilities

German municipalities and their water utilities are having to react to substantial ecological, economic and social changes that have been brought about by climate change, volatile energy prices and declining numbers of citizens. Innovative technologies and concepts for urban water and wastewater systems already exist, but so far they have only been implemented in pilot projects, mainly as the result of the institutional barriers they face. So how can urban water transformation be encouraged? Qualitative expert interviews, a literature analysis and a series of workshops involving representatives from utilities and stakeholders involved in urban planning were undertaken to identify the key obstacles and encourage action. The current challenges facing the implementation of innovative urban water systems include sector-focused planning approaches, path dependencies (such as technological and “mental” barriers), legal and institutional constraints, and complex structures of responsibilities. New institutional arrangements involving the key players (cooperation models) as well as new processes requiring a reallocation of labour could contribute to a smoother implementation. Innovative water systems present new strategic opportunities for water utilities. Two opportunities that are worthy of consideration in order to fully exploit the benefits of such systems are a strengthening of the water–energy link and an intensification of activities along the “water chain”. The findings in this paper reveal that the urban water infrastructure of the future promises new forms of cross-sectoral integration and co-management, and the coexistence of centralised and decentralised systems.