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Our Water Our Future The Next Stage of the Government’s Water Plan Boosting water supplies for Victoria’s cities and towns Victoria has just experienced the worst year of drought and lowest stream flows in our State’s history. In 2004 we put in place a long-term plan for water – Our Water Our Future. As a result we have implemented the most successful Foreword water saving campaign in Australia. Industry and business are being made to save water and recycling has increased from two per cent of Melbourne’s wastewater in 1999 to 14 per cent today.

Victorians have responded magnifi cently. This will increase the total supply for Melbourne Farmers have become more water effi cient. by 240 billion litres annually by 2011 – half of our Businesses and households have jointly reduced current annual water use. their water use by 22 per cent in Melbourne and We are also providing more water for regional by similar amounts in regional centres. centres including Geelong, Westernport, However saving water isn’t enough. We need South Gippsland and Hamilton. to increase our water supplies. These new projects are an important next step As part of our plan, we’ve been working on a in our efforts to secure Victoria’s water supplies, long-term solution. $4.9 billion will be spent in but we can’t lose sight of the ongoing need to major water infrastructure projects to provide the save water at home, on the farm and in industry. biggest boost to Victoria’s water supplies in 25 Climate change and drought are big challenges. years. Having a secure water supply will enable We will build Australia’s largest desalination plant Victoria’s economy and population to continue and modernise irrigation systems in Victoria’s to grow. Food Bowl in northern Victoria to capture lost water for farms, stressed rivers and urban households and businesses.

Steve Bracks Premier

John Thwaites Deputy Premier Minister for Water, Environment and Climate Change

Our Water Our Future The Next Stage of the Government’s Water Plan Page 1 1 The Plan at a Glance 3 2 Securing Victoria’s Water Supplies 6 3 Water Supply, Drought and Climate Change 18 4 Progress in Managing our Water Resources 24

Contents 5 Actions, Investments and Timing 27

Volumes of water Volumes of water are measured in litres. Different volumes of water are referred to in this document.

One litre 1 litre 1 litre 1 L One thousand litres 1,000 litres 1 kilolitre 1 KL One million litres 1,000,000 litres 1 megalitre 1 ML One billion litres 1,000,000,000 litres 1 gigalitre 1 GL

Page 2 Water availability and security are key strengths for the Victorian 1 economy. This plan provides water security for Victoria’s growing population and economy in the face of drought and the challenge of climate change. It will do this by: ≥ Diversifying and boosting water supplies in Melbourne, including through desalination ≥ Networking the State’s water resources in a Victorian Water Grid ≥ Enabling a rapid and flexible response to changing future water needs.

These actions will enable us to steadily move back to unrestricted water supplies in our cities and towns.

The plan involves: The Plan at a Glance 1. A new desalination plant for Melbourne 2. Modernising Victoria’s Food Bowl irrigation system to capture lost water for farms, the environment and Melbourne 3. Expansion of Victoria’s Water Grid 4. Upgrading Melbourne’s Eastern Treatment Plant to provide over 100 GL of recycled water in 2012 and assessing a range of alternative uses of this water 5. Supporting new and existing water conservation programs for homes and industry.

Our Water Our Future The Next Stage of the Government’s Water Plan Page 3 1. 2. A new desalination Modernising Victoria’s Food Bowl plant for Melbourne Victoria’s Goulburn Murray region is Australia’s The fi rst available savings from the project will be Desalination creates new water that does most important irrigation region. The Goulburn made available from 2010 for Melbourne via a not rely on rainfall. This plan provides for the Valley accounts for well over one quarter of new pipe – the Sugarloaf Interconnector – linking construction of a major desalination plant to Victoria’s agricultural output. Melbourne to the Goulburn River. service Melbourne, Geelong and towns in the This project presents a once-off, historic As part of this signifi cant investment, the Westernport and South Gippsland region late opportunity to ensure the future prosperity of Government will also fi nalise the feasibility study in 2011. the region through signifi cant new investment currently underway for the Murray-Goulburn The plant will be located in the Wonthaggi region in modernising ageing infrastructure to create Interconnector, which will link the Murray Valley which offers access to pure open ocean water a genuinely world class irrigation system – irrigation areas to the Goulburn Valley. This from Bass Strait and its freely circulating waters a once-in-a-hundred years reform. would increase the reliability of irrigation water supplies by linking these two large systems and to rapidly disperse the plant’s salty outfl ow. It will Modernising Victoria’s Food Bowl region will enabling water trade between them. add up to 150 GL annually to Melbourne’s water take up to eight years to complete and will system – around one third of Melbourne’s water involve a total investment of up to $2 billion. The impacts of the Food Bowl project will be needs. This is a nationally signifi cant project which positive and far reaching, delivering the biggest The water will be transferred via an 85 kilometre provides the opportunity for both the State and water upgrade in the systems’ history. Given pipe to Melbourne’s water supply system near Commonwealth Governments to invest and the size and complexity of the project, the Cardinia Reservoir. work together. Government will work closely in partnership with the community to fi nalise key elements of the The plant will use reverse osmosis fi ltration to Currently around 30% – up to 900 GL – of water project, including: remove salt and other impurities from sea water, in the Goulburn and Murray irrigation systems producing pure drinking water. is lost annually through system ineffi ciencies. ≥ Governance arrangements that involve These losses translate to around one quarter of local government and community input into Work to develop the plant will begin immediately Lake Eildon’s capacity. key issues, such as the work program and following an extensive feasibility study which has sharing of water savings investigated a number of sites. Under this plan, a major irrigation modernisation project in Victoria’s Food Bowl region will ≥ Safeguards for northern Victoria concerning The greenhouse gas emissions associated with generate new water by reducing system losses. water savings destined for Melbourne the power requirements of the plant will be offset through the purchase of renewable energy, It is estimated that approximately half of the total ≥ How the water savings destined for irrigation which means the plant will be carbon neutral. losses across the system can be captured as and the environment will be delivered water savings through modernisation – up to and managed. Decisions on delivery arrangements for the 450 GL per annum. desalination plant, including the role of the The Government will immediately establish a private sector, will be made later in 2007 The State Government will commence the fi rst Steering Committee comprising local councils, following a procurement and market testing stage of the project to secure savings of up to interested groups, the Food Bowl Alliance and process. Final decisions on construction and 225 GL annually with investment of up to $1 the broader community to guide the further operation arrangements will be made by mid billion, with new State funding of $600 million development of the project. as well as further contributions from water 2008, enabling the plant to produce 150 GL In addition, the Government will consider authorities associated with this project. by late 2011. setting up a purpose-built body to oversee This investment will build on existing small the delivery of the project to modernise the irrigation modernisation programs in the Goulburn and Murray irrigation systems. This Shepparton and Goulburn irrigation districts body will work with local communities and all already underway. levels of government to manage and complete the project. Water savings, up to 225 GL annually, will be shared equally with the irrigators, the environment and Melbourne.

Page 4 3.4. 5. Expansion of Victoria’s Water Grid Increasing recycling Supporting new and existing Victoria has a collection of water storage dams Recycled water provides a secure, rainfall water conservation programs and pipes based on rainfall patterns of the independent supply of water that is fi t for a wide All Victorians need to be involved in water past hundred years or more. These systems range of uses. It must be made available as part conservation if we want water security. Our are unlikely to be suffi cient in an era of extreme of a strategy to diversify supplies, and a strategy recent water conservation efforts have kept weather events and climate change. to improve environmental health. our water storages at a higher level than they The Victorian Government and water authorities Around half of Melbourne’s wastewater is treated otherwise would have been. will expand Victoria’s Water Grid - a network of at the Eastern Treatment Plant (ETP). Recycled We will continue to develop our approach to rivers, channels and pipes linking Victoria’s major water from this plant is able to be delivered to water conservation and household and industrial water systems. Key new elements of the Grid sites nearby for a range of potential uses. The use of water, building on the excellent effort of will be built to enable water to be moved from Government is committed to upgrading the ETP Victorians to conserve water. where it is to where it is needed most. Major to tertiary standard, a level where a wide variety Grid initiatives already underway include: of reuse is possible. The upgrade of the ETP will be completed during 2012. It will produce over ≥ The Goldfi elds Superpipe connecting How Victoria’s communities, 100 GL of high-grade recycled water. Bendigo and Ballarat to the Goulburn River businesses and environment We are already recycling 14% of the city’s will benefit ≥ The Wimmera-Mallee pipeline system. wastewater through agricultural, residential, Careful management of Victoria’s water supplies New Victorian Water Grid projects outlined in parks and gardens and industry recycling will provide communities, businesses, farms and this plan will see the construction of over 250 schemes. These uses of recycled water will the environment with water security for growth in kilometres of new pipe. Projects include: be progressively expanded. case of ongoing drought and the extremes that ≥ The new Hamilton-Grampians Interconnector This plan commits to broadening the options may come with climate change. We will steadily move back to unrestricted water supplies in ≥ The new Melbourne-Geelong Interconnector under consideration for use of this recycled water. While substitution for Latrobe Valley our cities and towns, while continuing water ≥ The new Sugarloaf Interconnector connecting river water in power system cooling remains an use effi ciency. Melbourne to the Goulburn River option, other possible uses of recycled water will The combined impact of new water supply ≥ The new desalination plant link to Melbourne. be investigated. The Government will also work projects will increase Melbourne’s water with the power generators to examine ways of Another link being investigated is a Murray- supply by 240 GL by 2011 – half Melbourne’s reducing water demand. Goulburn Interconnector to bypass the Barmah annual demand. Choke on the Murray River. A further option being considered is substituting The Food Bowl Modernisation Project will assist recycled water for high seasonal fl ows in the Geelong will now be able to rely on the Victoria’s agriculture and irrigation industries to lower Yarra River to allow more fresh water Melbourne system (including desalination expand their strong contribution to Victoria’s to be retained in Melbourne’s storages. The and the Sugarloaf Interconnector) for its economy and exports. Government will also investigate alternative future growth. Westernport and South industrial uses for recycled water near the ETP, The environment will benefi t from one third Gippsland will also have future reliability including the West Gippsland region. of the savings made from the Food Bowl improved by links to Melbourne’s system Modernisation Project, improving river health once desalination commences. and wetlands throughout the Goulburn and Murray regions and into South Australia. Our households and industries will be assured of reliable, safe and affordable water supplies with good reserves for future growth. With secure water supplies, our economy and population will continue to grow.

Our Water Our Future The Next Stage of the Government’s Water Plan Page 5 Even with the excellent achievements of Victorians in conserving 2 water, more supply is needed to guarantee security for cities and towns in the light of the reduced inflows to our storages that are likely under climate change. The Victorian economy is strengthened by a secure water supply. A growing population also requires growing supplies.

Desalination As set out in the Central Region Sustainable What are the environmental impacts? Water Strategy, the Government has been The two main environmental impacts of the working with Melbourne Water to thoroughly desalination plant will be the salty outfl ow and examine the feasibility of a desalination plant for the greenhouse gas emissions from powering Melbourne. That work has now been completed. the plant and piping the desalinated water Work will begin immediately on one of the to Melbourne. world’s largest desalination plants, with a Desalination produces a by-product of water capacity of up to 150 GL per annum. The plant that is about twice as salty as sea water. This will be capable of being upgraded to 200 GL will be piped back into Bass Strait through an per annum if needed. It will be situated in the underground and undersea tunnel. Within a Wonthaggi region, which offers access to pure short distance of the undersea outlet, the salty open ocean water from Bass Strait, and freely outfl ow will have dispersed with low impact circulating waters which will rapidly disperse the on the sea environment. plant’s salty outfl ow. The plant requires an inlet structure under the Other sites were considered as part of the sea to allow water to be piped to it. It will draw in feasibility work by Melbourne Water. Port Phillip water at a low speed so as not to affect sea life. and Western Port Bays and the Surf Coast

Securing Victoria’s Water Supplies Water Securing Victoria’s The inlet and outlet structures will be designed were examined. However sites on the bays in accordance with Environment Protection would face challenges regarding source water Authority requirements. quality and salty outfl ow into relatively poorly circulating waters. In addition, Western Port A 150 GL per annum plant will use sites would impact on internationally signifi cant approximately 90 megawatts of electricity RAMSAR wetlands. Surf Coast sites would from the Victorian energy grid. The resulting require signifi cant and expensive infrastructure greenhouse gas emissions will be offset through upgrades to transfer the water across Melbourne the purchase of renewable energy. from west to east, as current water infrastructure In other words the plant will be carbon neutral. has been built to transfer water from east (where The cost of this renewable energy will be part the catchments are) to west. of the project cost and will be paid for through water charges.

Page 6 Size Delivering the plant The desalination process The inlet and outlet structures and the transfer Work will begin immediately, with the design The Melbourne desalination plant will use a pipe to Melbourne will be built with a capacity and approvals phase completed during 2008. process called reverse osmosis to produce to increase output up to 200 GL per annum. The plant will be ready to supply Melbourne with fresh water. Reverse osmosis pushes sea water It is signifi cantly less expensive to size these desalinated water by the end of 2011. through a membrane that takes out salt and components for the maximum capacity from other impurities. The result will be drinking water A decision will be made in the second half of the outset, rather than duplicating or upgrading that complies with the Australian Drinking Water 2007 on the best delivery arrangements for the them if this is needed in the future. Guidelines. Most important, desalination does plant, including the role for the private sector. not depend on rain which is why it is being The plant itself can be built in modules to The delivery arrangements will be consistent with increasingly relied upon by cities in Australia, allow for economies of scale in operation. the Government’s policy of retaining ownership including Sydney, Brisbane and Perth, and While 150 GL is the planned capacity, the of water resources in public hands. around the world as climate change reduces capacity will be capable of being varied prior rainfall reliability. to the Expression of Interest phase of tendering in 2008. Variations may occur for a number of reasons, including better information from studies of climate change.

Figure 2.1 Desalination using reverse osmosis

Our Water Our Future The Next Stage of the Government’s Water Plan Page 7 Food Bowl Modernisation Together the Goulburn and Victoria’s Murray This Food Bowl Modernisation Project has Murray-Goulburn Interconnector irrigation systems account for over 70% of potential to capture up to 450 GL of lost water The Barmah Choke is a narrow section of the Victoria’s stored water, and provide 3,500 GL annually. The Government and water authorities Murray River near the town of Barmah. The of water for irrigation annually. Up to 900 GL will invest $1 billion in this project. It is expected Choke limits the volume of water that can be of water is lost annually from these systems that this will deliver up to 225 GL annually to moved along the river to supply peak demands due to poor measurement, leakage, seepage, be shared between the irrigation system, the downstream of the Choke. This impacts on evaporation and an outdated irrigation delivery environment and Melbourne. irrigation, household and industrial water system. Around 30% of water in these systems As part of the Food Bowl Modernisation Project, supplies from Echuca to Adelaide. The impact is lost. the Sugarloaf Interconnector linking Melbourne of the Barmah Choke in constraining fl ow has Irrigators and their regional communities want to the Goulburn River will be built. It will deliver been exacerbated recently with the development to fi x irrigation infrastructure and reform irrigation up to 75 GL of new water annually to Sugarloaf of water markets and the drought. practices. Irrigation modernisation provides an Reservoir in Melbourne. Melbourne will benefi t in The Government is investigating the feasibility opportunity to generate new water and share 2010 from the fi rst available water saved through of building a Murray-Goulburn Interconnector that water between improving reliability of supply irrigation modernisation. which would enable water to bypass the Barmah for irrigators, environmental fl ows and urban use. The Government will immediately establish Choke. It would also enable water from the It also provides an opportunity to improve the a steering committee to guide the further Murray Valley irrigation area to be used within level of service to irrigators. development of the project. the Goulburn system. The bypass will enable the Until now, irrigation modernisation projects have interconnection of the Southern Murray Darling been undertaken on a small, localised basis. This Basin systems: the Goulburn system (1900 GL); plan commits to a comprehensive modernisation the Victorian Murray system (1600 GL) and the strategy across the Goulburn and Murray NSW Murray system (2000 GL). irrigation areas. A key consideration in investigating the feasibility Under this plan, a major irrigation modernisation of the Murray-Goulburn Interconnector is to project will generate new water by addressing ensure that it and its operation would have no system losses. adverse environmental impacts on the iconic Barmah-Millewa forest and the connecting river systems. Where possible, it would be used to improve their condition. This is quite plausible, as the forest has been fl ooded in the past at inappropriate times, promoting poor environmental outcomes. The Food Bowl Modernisation Project will provide the future structure through which the Murray-Goulburn Interconnector could be developed, if feasibility studies prove attractive.

Page 8 The Sugarloaf Interconnector The Sugarloaf Interconnector will be built to Two pipe routes have been investigated: one supply water to Melbourne by the fi rst half from Rokeby (near Tallarook) on the Goulburn of 2010. River to Yan Yean and Sugarloaf Reservoirs in Melbourne via the Hume Highway, and the other The Sugarloaf Interconnector will enable water from near Yea to the Sugarloaf Reservoir via the savings from the Food Bowl Modernisation Melba Highway. Project to be piped to Sugarloaf Reservoir in Melbourne. The Sugarloaf Interconnector is a The Melba Highway route has been chosen as it key addition to the Victorian Water Grid. It will is shorter and will be quicker and less expensive be the fi rst of the proposed large supply options to build than the Hume Highway route. for Melbourne to come on line. Construction will begin in 2008 enabling water It will transfer an average annual volume of to be supplied by 2010. Melbourne Water will be 75 GL. This volume is less than 5% of the entitled to purchase the fi rst 75 GL of new water total volume of water available in the Goulburn from irrigation savings for this supply. system, and is compatible with the storage, treatment and distribution capacity available at the Sugarloaf Reservoir. Investment in treatment for the increased volume of water is part of this plan.

Figure 2.2 Food Bowl Modernisation and the Sugarloaf Interconnector

Our Water Our Future The Next Stage of the Government’s Water Plan Page 9 Expanding the Victorian Water Grid Some of the State’s water systems are Figure 2.3 illustrates the Melbourne water The Victorian Water Grid connected through a grid of rivers, channels, Grid and fi gure 2.5 (on page 14) illustrates the and the environment pipes and storages. But the focus has generally Victorian Water Grid in its current and expanded We now understand the fl ow regimes necessary been on each river valley and its regional form. Key new elements of the Grid include: for river health. The Government will ensure that storages looking after the local region. In ≥ The new Hamilton-Grampians Interconnector the Grid is developed and managed to minimise the face of the risks due to climate change, environmental impacts. this approach is inadequate. ≥ The new Melbourne-Geelong Interconnector Environmental water managers will be able to Developing the Water Grid can: ≥ The new Sugarloaf Interconnector connecting Melbourne to the Goulburn River manage risks across water systems and make ≥ Increase the security of water supplies by the most effi cient use of environmental water. diversifying the sources of water available for ≥ The new desalination plant link to Melbourne In future planning, the environmental entitlement communities connected by the Grid ≥ Links to enable Westernport and South to water will need to be treated as a resource ≥ Enable water to be traded more readily, by Gippsland to share access to desalination. which can and will be dedicated to achieving specifi ed environmental outcomes. The Grid making it easier to transfer water to where it These new elements, along with the Goldfi elds is most needed and valued can also be used to relieve environmental stress Superpipe and the Wimmera-Mallee pipeline, in some systems. ≥ Increase the value of supply options (current create a new network of almost 10,000 and future) by increasing the fl exibility and kilometres of pipe. diversity of uses. The expanded Victorian Water Grid will allow more water to be transferred between water systems. It not only maximises fl exibility for water sharing across regions and between uses, it also provides a valuable insurance option to secure water supplies for households and industries across the State. Connections between rural, regional and metropolitan water supplies provide for greater security of supply in the face of rainfall uncertainty.

Page 10 New projects A Sugarloaf Interconnector B Melbourne - Geelong Interconnector C Desalination at Wonthaggi D Tarago Reservoir reconnection

Under investigation E Eastern Water Recycling Proposal F Environmental fl ows (Yarra River)

Melbourne Water Main Service Reservoir Water catchments Figure 2.3 Melbourne Water Grid

Our Water Our Future The Next Stage of the Government’s Water Plan Page 11 Recycling Eastern Treatment Plant upgrade Eastern Water Recycling Proposal An initial investigation into delivering high quality recycled water to the Yarra River The Eastern Treatment Plant (ETP) at Carrum The power generation industry, based in indicates that there are feasible pipe routes on the east side of Port Phillip Bay is operated the Latrobe Valley, is critical to the Victorian through Melbourne to transfer the water, and by Melbourne Water and is one of Melbourne’s economy. The Latrobe Valley power generators that treatment processes may be available to two major sewage treatment plants. It and other major industries in the Valley use meet environmental and health standards. receives around half of Melbourne’s domestic more than 130 GL of water annually, mostly for sewage and industrial wastewater. Currently evaporative cooling in power plants. Most of this Further investigations will: this wastewater is treated to Environment water comes from the Latrobe River and Blue ≥ Confi rm the optimum and maximum volumes Protection Authority standards before being Rock Dam. of additional potable water that could be either reused or discharged to the ocean at Once the ETP upgrade is complete, the Eastern taken from the Yarra River under a range Boags Rocks, near Gunnamatta Beach on the Water Recycling Proposal could transfer over of rainfall scenarios Mornington Peninsula. 100 GL annually of tertiary treated water to the ≥ Examine the environmental impacts of the The Government has announced that the ETP Latrobe Valley via a new pipe. necessary separation of sites for extraction will be upgraded, to be completed in 2012. If this recycled water is supplied to industry, of river water and input of recycled water There will be complex technical trials of different it would free up water for Gippsland and for and the potential to manage this treatment methods in 2008, which will inform Melbourne via a new pipe connecting Blue Rock Confi rm environmental and health standards a decision on which method to implement in Dam in Gippsland to Cardinia Reservoir, and for ≥ for the use of recycled water for river fl ows 2009. The full program to upgrade the ETP the environment. A feasibility study has identifi ed will then commence. pipe routes, treatment processes and plant sites, ≥ Examine the interrelationship with the The upgrade will treat all water at the ETP to and included a preliminary assessment of key Sugarloaf Interconnector, including storage tertiary standard, producing between 110-130 GL environmental, social and economic issues. availability in Sugarloaf Reservoir and capacity of the water treatment plant of recycled water annually. This includes 15 GL With the current extended drought, and the at Sugarloaf committed to existing recycled water projects uncertainty associated with climate change, the such as the Eastern Irrigation Scheme. This Government will work with the power industry ≥ Provide detailed costing of this option leaves up to 95-115 GL per annum available to ensure it has access to secure water supplies. ≥ Confi rm project delivery schedules. for the continued expansion of residential, The business case will include examining the industrial and open space recycled water use. potential to reduce industrial water use in the It will also underpin potential large-scale water Latrobe Valley to contribute to the security of Recycled water returned to water supplies recycling. With the further treatment provided water supply for all users in the Valley as well as A number of countries use recycled water safely by the ETP upgrade, this water will be safe for Melbourne. It will also assess the possible and successfully to supplement water supplies, and suitable for a wide range of purposes. implications for the use of desalinated and recycled water. known as “indirect potable reuse”. South East A number of options for use of this recycled Queensland is currently building a large-scale water will be examined in the course of a water recycling scheme to add to its drinking business case for ETP reuse, due in 2008. Substitution of environmental fl ows water supply. While we are not planning to add This business case will examine the Eastern – Yarra River recycled water to Melbourne’s drinking supply, Water Recycling Proposal and the substitution it remains a potential source of new water that Water is pumped from the Yarra River at Yering of recycled water for environmental fl ows. is protected from the impact of climate change Gorge into Sugarloaf Reservoir for Melbourne’s and would provide diversity of supply. water supply. One option for using the recycled water produced after the completion of the The Government will continue to monitor ETP upgrade is to pump a portion of it north to advances in technology and international and the Yarra River just below Yering Gorge. This interstate experience; however indirect potable would allow more river water to be retained in reuse is not supported for Victoria. Melbourne’s storages.

Page 12 Water conservation in households and businesses Along with water supply from our network of Through the Pathways to Sustainability program, reservoirs, water conservation will continue to Melbourne’s water retailers are working with underpin future water security. A litre of water around 1500 major industrial water users to saved is equivalent to a litre of water added develop water saving plans that will reduce to the system by supply, but a litre saved is industrial water use by 5 GL annually. In cheaper, is often quicker to fi nd, and involves cooperation with industry, this target is being lower greenhouse gas emissions and other accelerated to see savings achieved from 2008. environmental impacts. Water conservation Melbourne’s record of achievement with water also buys valuable time to implement new conservation will continue to produce savings, supply options. set out in fi gure 2.4. The current range of water conservation The water businesses will also soon begin a programs, such as funding support for program of tailored household water savings water effi cient products and water pricing to where individual households will be encouraged, encourage saving water, will continue. The next assisted, and given the tools they need to save generation of water saving programs will also water and live within a smaller, sustainable explore innovative ways of conserving water, “water budget”. including smart metering, urban water markets and sophisticated behaviour change programs.

Figure 2.4 Per capita water consumption in Melbourne Households and businesses are becoming more water effi cient Source: Central Region Sustainable Water Strategy Central Region Sustainable Water Source:

Our Water Our Future The Next Stage of the Government’s Water Plan Page 13 Ó Victorian Water Grid Victorian Water

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Page 14 Projects underway 1 Wimmera-Mallee Pipeline 2 Sunraysia Irrigation Project - Robinvale district 3 Goldfi elds Superpipe 4 Central Goulburn irrigation modernisation 5 Shepparton irrigation modernisation 6 Newlyn Reservoir Interconnector 7 Tarago Reservoir reconnection 8 Macalister irrigation modernisation 9 Campaspe Pipeline to Waranga Channel

New projects 10 Food Bowl Modernisation Project 11 Sugarloaf Interconnector 12 Hamilton-Grampians Interconnector 13 Melbourne-Geelong Interconnector 14 Desalination at Wonthaggi

Projects under investigation £x 15 Murray-Goulburn Interconnector 16 Eastern Water Recycling Proposal { x Existing infrastructure

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Our Water Our Future The Next Stage of the Government’s Water Plan Page 15 Dealing with water shortage while new supply is being built Actions already underway to secure water The fi rst of the new supplies under this plan supply include: will provide additional water into the Melbourne system in 2010, followed by further additions in ≥ Adding water to the Melbourne supply 2011 and after 2012. system by reconnecting the Tarago Reservoir to the system, providing around 15 GL If infl ows continue to be extremely low in annually, coming on line in 2009 the interim, further action will be taken in the immediate future to ensure the security of ≥ Maintaining existing savings and accelerating Melbourne’s water supplies. This will include: our water conservation programs, by increasing funding to bring forward ≥ Moving to Stage 4 water restrictions conservation programs such as installation in August 2007 if necessary of water effi cient showers and washing ≥ Reducing environmental fl ows in the machines, and more industry water saving Yarra and Thomson Rivers plans. Compared to 2002, this will provide 90 GL of water annually by 2015 ≥ Further reducing demand. ≥ Increasing the operational effi ciencies of If Melbourne is required to move to Stage 4 Melbourne’s water supply system, adding water restrictions, environmental fl ows will be 20 GL of supply by the end of 2008 reduced by 10 GL in the Thomson River and 10 GL in the Yarra River. It may be necessary Deferring additional new environmental fl ow ≥ to further reduce environmental fl ows if extreme commitments for the Yarra until Melbourne drought conditions continue. is back on Stage 1 water restrictions. These are emergency actions that will cease when supplies enable Melbourne to move back to Stage 3 water restrictions. The impact of reducing environmental fl ows will be carefully monitored and environmental contingency and recovery plans will be put in place during this period.

Page 16 Table 2.1 Future Melbourne water supplies

Supply source Potential volume Date on line of water, GL per annum

Tarago 15 2009 Reconnection

Sugarloaf 75 First half 2010 Interconnector

Desalination 150 End 2011

ETP upgrade, 50-100* After 2012 recycled water

Total 290-340 Comes on line progressively

*The volume available for supply will depend on use

Securing Melbourne’s water supplies By introducing supply from more than one This program of supply will enable Melbourne source, including rainfall independent sources households to move off the current restrictions such as desalination and recycling, the new regime to the more secure level of service they supply projects provide security through diversity have historically received. If the scenario based of supply. on the past three years (outlined in section 3 of this plan) is taken as a guide, the new supply The new supply projects and the Tarago will enable Melbourne to move to Stage 2 water reconnection underway will provide around restrictions by 2010 and progressively move 240 GL per annum to Melbourne and back to low level or no restrictions by 2013. If surrounding regions’ systems by the end infl ows closer to the average of past 10 years of 2011, with additional recycling options are restored, Melbourne will move out of water potentially coming on line later. In total this would restrictions earlier. provide a conservative addition to Melbourne’s water supply of 290 GL annually. By 2010 annual supply to Melbourne’s system will exceed annual water used in 2005/06. Supply will grow further after desalination comes on line in 2011, enabling rebuilding of storages (see fi gure 2.6).

Figure 2.6 New water for Melbourne

700 Desalination Water used 2005/06 150 GL 600

Sugarloaf 240 GL Interconnector New water for 500 Tarago reconnection 75 GL consumption and 15 GL to rebuild storages

400 387 GL

300

200

Annual volume of water supply to Melbourne (GL) 100

0 Average supply 2009 2010 2011 from dams for last 10 years

Our Water Our Future The Next Stage of the Government’s Water Plan Page 17 Page18 Water Supply, Drought and Climate Change 3 Figure 3.1Water useinVictoria–%usedbysector andMelbourne Source: StateWater Report2004/05 and economicexpansion. water supplieshassupportedVictoria’s strongpopulationgrowth our wayoflifeandthehealthenvironment.Efficientuse Secure watersuppliesarefundamentaltotheVictorianeconomy, industry andbycitiestowns. proportion istakenoutforuseonfarms,in in streams, riversandaquifers,oftenasignifi cant off intostreams, riversandaquifers.Ofthewater runs A smallpartoftherainthatfallsonVictoria economic valuesofourfreshwater environments. consideration ofthesocial,environmental and we consumemustbetakenwithrecognition and foundation forregional economies.Thewater for recreation andregional tourismanda plants. Theyare alsoamajordrawcard diverse populationsofuniqueanimalsand are highlysignifi cant ecosystems,supporting and agriculture, ourrivers,lakesandwetlands As wellasproviding waterfortowns,industry Drought The current drought has highlighted the In a period of reduced rainfall, surface water importance of water to the economy, community run-off is the fi rst casualty. Less rain means and environment. For more than 10 years, a even less water for our rivers and dams. As a large part of the State has struggled with rainfall rule of thumb, a decrease in rainfall results in a signifi cantly below the long-term average. two- to three-fold decrease in run-off to rivers. Its severity has been unprecedented, and its With increasing temperatures and reduced soil impact has been widespread across the State. moisture, catchments become less effi cient at producing run-off. Many regional towns have been on strict water restrictions for years and irrigators have received Over the past 10 years, run-off into the reduced allocations of water. Our rivers and Murray Darling Basin, a critical resource to streams have suffered due to the combined Victoria’s and the nation’s well-being, has reduced effect of water extraction and low fl ows over an by half compared to the pre-1997 average. extended period. For some Victorian streams the Never, at the end of a 10 year drought, has impact of the drought was 10 times more severe such a signifi cant reduction in infl ow occurred than it would have been without today’s dams as in 2006. and weirs.

Figure 3.2 River Murray Inflows 1891 - 2007 Infl ows in 2006 were the worst in recorded history Source: Murray Darling Basin Commission Source:

Our Water Our Future The Next Stage of the Government’s Water Plan Page 19 For Melbourne, infl ows over the past 10 years The extreme failure of winter and spring rains in Coping with the record drought present a similar picture. Over the 100 years 2006 (traditionally providing the bulk of infl ows) Despite the record drought during 2006, until the mid-1990s Melbourne and surrounding on top of our already dry catchments meant Victoria’s towns and regions have coped. centres had relatively reliable rain that provided 2006 infl ows were 30% lower than the previous This is a credit to the successful drought the basis for confi dent planning of future driest year. planning by water authorities and responsible water supplies. The severity of the drought over the past 10 behaviour of communities. That situation has changed: the past decade years, and during 2006 in particular, has raised Each of the 16 urban water authorities around has been one of sustained drought. The total questions about the impact climate change is the State has its own drought response plan, infl ows to Melbourne’s water storages from 1997 having on our water resources. It is possible that with in-built trigger points for water restrictions to 2006 were 35% lower than the pre-1997 Victoria is suffering a major long-term reduction and contingency measures, such as fi nding average. Yet even with the continuation of this in average rainfall – a step-change in water new groundwater, temporarily taking more reduced infl ow, the system was capable of availability due to climate change. water from the environment and pumping absorbing the impact and recovering. more from storages. To ensure adequate supplies in a number of those towns on Stage 4 water restrictions, it has been necessary to reduce, and in some cases cease, environmental fl ows in 18 river systems. But we cannot continue this way.

Figure 3.3 Melbourne storage inflows 1913 – 2006 Infl ows in 2006 were the worst in recorded history

Source: Melbourne Water

Page 20 Climate change Climate change is presenting worldwide Perth started to experience a number of step- Water security under uncertainty challenges to all communities to reduce changes in climate, resulting in progressively less The changes observed in rainfall and run-off over greenhouse gas emissions and adapt. surface water run-off. After three decades of the past 10 years, and 2006 in particular, require Throughout Australia, water and other natural coping, Perth has built a desalination plant and a change in the basis for water planning. Future resource and infrastructure managers must now another is planned. rainfall patterns may be different from the past, now plan to adapt to an uncertain future. We are now planning major investment to meet although the precise pattern is unclear. The Intergovernmental Panel on Climate the challenges of climate change, and we are We need to move away from relying on one Change’s Fourth Assessment Report 2007 conscious that knowledge is constantly evolving. major source of supply from our reservoirs to concludes that warming of the earth’s climate The Government will be guided by the best a portfolio of diverse water sources. We need system is unequivocal. The evidence for this analysis available to help us understand and to develop a new water balance of traditional comes from observations of increases in global manage the risks and uncertainties that climate sources alongside the contribution from water average air and ocean temperatures, widespread change brings. conservation, new rainfall independent sources melting of snow and ice, and rising global mean Understanding the impacts of climate change of water and water reuse from recycling. sea level. and variability on Victoria’s water resources Like a portfolio of investments that makes up As a result of climate change, Victoria is is essential to water planning. To improve our superannuation funds, a diversifi ed water expected to become warmer and drier. It is its understanding, Victoria is participating in portfolio needs to be periodically reviewed and forecast that there will be a signifi cant reduction a national, CSIRO-led, three-year research regularly updated as new information on costs, in rainfall, and it will be more variable. This program - the South East Australian Climate feasibility, climate and rainfall becomes available. means less water fl ow into rivers and a decrease Initiative - aimed at better understanding the in water supplied to our reservoirs. The recent factors that impact on our climate and its impact In this way we can maintain our water security record of infl ows to the Murray River and on our water resources. The results of this work, and manage the risk and uncertainty associated Melbourne’s storages (see fi gures 3.2 and 3.3) and continued monitoring of infl ows to our with climate change. A key part of this portfolio suggest that we may have already experienced reservoirs, will inform future water planning. planning is the development of robust a step-change in our climate. Thirty years ago, rainfall scenarios.

Figure 3.4 Victorian Rainfall – Winter 2006 Winter 2006 rainfall was much lower than the long-term average Source: Australian Bureau of Meteorology.

Our Water Our Future The Next Stage of the Government’s Water Plan Page 21 Scenarios to guide decisions In the past, long-term rainfall throughout parts to Melbourne’s system (now underway) and Figure 3.5 shows these three scenarios in terms of Victoria has been fairly reliable. Now, with add a major new supply in the medium term, of their impact on Melbourne’s water storages the rainfall uncertainty due to climate change, along with reducing our use through ongoing over the period 2007 to 2016, showing the level many more outcomes are possible, and different conservation and effi ciency measures. Under at which Stage 2 and Stage 4 water restrictions rainfall patterns may emerge in different parts of this scenario, infl ows will be lower than in are introduced. the State. the past but this will still be adequate when Our water planning must enable us to deal with combined with these additional measures to We have now developed a number of rainfall very low infl ows. When it comes to water, being balance supply and demand. and infl ow scenarios to guide us in water supply risk averse and prudent makes good sense. planning for Melbourne. These are plausible These two scenarios were included in the The infl ows of the past three years will therefore scenarios, designed to cover the range of Central Region Sustainable Water Strategy in be added to planning Melbourne’s future water possible futures for rainfall and run-off. They will 2006. The third new scenario takes into account supply system. inform the way we adapt our water management what we now know is possible, by incorporating Despite the impact of climate change, we see to conditions as they unfold. the extreme low infl ows of 2006 in a scenario this as a relatively unlikely scenario. Based based on the past three years’ experience. This Put simply, if we use the past 100 years’ average on the average of the last 10 years, with scenario represents a step-change in climate. infl ows as the basis for planning Melbourne’s conservation and planned new supply, it is water supplies, we don’t need to add to our If the past three years’ infl ows are taken as more likely that we will see an earlier recovery water supply at all in the short to medium term. a guide, storage levels progressively decline in storages. But to manage the risk of very Under this scenario, good rains will come and and more than one major new supply source low infl ows, new water supply projects will be fi ll the storages. needs to come on line. Without this new supply, brought forward immediately. If the past 10 years’ average infl ows are Melbourne households would remain on severe used, we will need to add the Tarago Reservoir water restrictions for the foreseeable future.

Figure 3.5 Forecast Melbourne storage levels 2007-2016 under three inflow scenarios With no new supply Source: Melbourne Source: Water

Page 22 Examining the options A repeat of infl ows of the last three years Choosing the best options requires new supply as soon as possible, even for Melbourne and its region with active conservation measures. Some major Taking Melbourne off severe water restrictions supply options, such as the provision of recycled (stages 3 and 4) and eventual restoration of water from the Eastern Treatment Plant upgrade unrestricted water supply on a sustained and (to be completed in 2012), can only play an secure basis is the key objective. important role in the longer term. The range of available large supply options As a result, this plan provides a number of new able to meet the shortfall were investigated supplies. A portfolio of supply options has been considering the following factors: developed which: ≥ How much water does the option produce? ≥ Focuses on conservation and using water wisely ≥ When can it deliver water? Can it deliver water soon enough to avoid the prolonged Expands the Victorian Water Grid ≥ use of severe restrictions? within Melbourne and regional Victoria ≥ What does it cost? ≥ Links with wider Victorian water reform to modernise irrigation and expand ≥ The way the option relates to or links with water trading others (e.g. does it support or close off others?) ≥ Introduces diversity to supply, by drawing new water from several sources ≥ The risks and uncertainty around the volume, timing, cost, approval processes and delivery Responds to climate change by introducing ≥ for each option supplies that are independent of rainfall ≥ State of readiness. Are the required Enables the progressive rebuilding of water ≥ regulations or other controls in place? supply in Melbourne’s storages. Implementation of the options chosen will be In Victoria’s regional cities and towns, water subject to all of the required environmental authorities have been carrying out similar approval processes during the development analysis of the water supply and demand needs of detailed business cases, design of their areas. This plan integrates them into a and construction. solution via the Victorian Water Grid. The reuse of stormwater from Dight’s Falls on the Yarra River was examined but is not proposed as one of the supply options for Melbourne. This option is faced with a number of technical and environmental constraints that make it unsuitable as a large supply option.

Our Water Our Future The Next Stage of the Government’s Water Plan Page 23 Victorians have shown through their actions to save water that 4 they are well aware of the importance of sustainable water management at the household level, in industry, and in the rural sector. Government policy – such as the 2002 Victorian River Health Strategy, the 2004 Our Water Our Future action plan, and the 2006 Central Region Sustainable Water Strategy – has taken up this challenge.

We must continue to emphasise sustainable Victorians have achieved a great deal in saving water management to protect the needs water, looking after rivers, improving agricultural of future generations. Sustainable water use of water, making industry’s use of water management draws from: more effi cient and developing the Victorian Water Grid. This has enabled Victoria to adapt to and ≥ Reliable and safe water and sewerage cope with the challenges posed by the 10 year services for cities and towns drought, and sets our community up well to ≥ A high value, low environmental impact deal with the future. irrigation industry which strengthens rural and regional communities ≥ Healthy rivers, aquifers, fl oodplains, Figure 4.1 Australian capital city estuaries and catchments water use 2005-06 ≥ Communities that appreciate all the services Melbourne is the most water provides and that can make choices water effi cient capital city about how those services are to be delivered ≥ Communities and industries that value and conserve water ≥ Effi cient, accountable and innovative water service providers. Progress in Managing our Water Resources Progress in Managing our Water Source: National Water Commission and Water Services Commission and Water National Water Source: Association of Australia, National Performance Report 2005-06

Page 24 Conservation and efficiency As the previous section of this plan shows, In 2004, the Government’s Our Water Our Future Victorians can be proud of their achievements Melbourne and other Victorian urban centres action plan made water conservation the fi rst in saving water. The water saved in Melbourne (along with the rest of urban Australia) cannot priority. As a result of the community’s efforts, since 2002 has meant that our water storages rely solely on easily accessible and low-cost Melbourne has become Australia’s most water are at a higher level than they would have supplies of surface water. In the past, this has effi cient capital city (see fi gure 4.1). been without conservation (see fi gure 4.2). been the cheapest and most energy effi cient The volume saved – 250 GL – is equivalent to Since the 1990s, Melbourne’s annual per capita option for water supply. While Victoria’s water fi ve and a half years of supply from Perth’s new water consumption has reduced by 22% from storages will remain the basis for secure desalination plant. Without this carefully planned 423 to 331 litres per day. With the additional supplies of water across much of the State, and conscientious approach to water saving, savings achieved under restrictions, this water conservation and effi ciency provide Victoria would be considerably worse off today. reduction has increased to 28%. This includes cost effective and environmentally friendly reductions in both household and industry measures to balance water supply with demand. use. We have used a mix of conservation and Conservation reduces pressure on our natural effi ciency techniques including: water effi cient water sources, saves energy and reduces buildings and appliances; water effi ciency greenhouse gas emissions. programs for industry; pricing to encourage prudent use; and rebates for water saving products and water restrictions.

Figure 4.2 Melbourne’s storages 2002-2007 Storages would be 250 GL lower without conservation Source: Melbourne Source: Water

Our Water Our Future The Next Stage of the Government’s Water Plan Page 25 Looking after our rivers Irrigation reform To manage water use sustainably it is important Irrigation is the major user of water in Victoria, Modernisation of the irrigation sector – to reduce to ensure that there are suffi cient fl ows to using 77% of harvested water. In return, irrigated water lost through ineffi ciency and to improve maintain river and fl oodplain environments. It agriculture is immensely valuable for the State service to irrigators – helps to achieve the goals is also necessary to improve water quality in and its communities, generating $9 billion in of increasing productivity and improving results rivers and restore degraded riverbanks and fl ood production annually and $1.53 billion in exports. for the environment. In this plan, a third benefi t plains. These actions protect the integrity of river – improved water security for households and Some irrigation infrastructure is nearly a century systems to ensure the continued supply of fresh industries – has been added. old, and needs to be modernised. The goals for water and sustain native plants and animals irrigation reform are an increasingly productive Examples of irrigation modernisation already that live in and around rivers and wetlands. irrigation sector and lower environmental impact. underway include programs in the Macalister, The Government’s 2002 Victorian River Health A key to increasing productivity is to enable Shepparton and Goulburn irrigation districts. Strategy establishes the framework for managing irrigation water to move from where it is available Channel automation and repairs already these different aspects of river health in an to where it is most needed and most valued underway to ageing infrastructure in the integrated way, and it is reaffi rmed in Our Water through water trading. Goulburn irrigation district will save 20 GL Our Future. of water annually by the end of 2008. In the The Government has instituted major reforms To provide environmental fl ows for rivers, Shepparton irrigation district, the fi rst major to water entitlements to facilitate water trade. the Government has established an initial modernisation project will commence this year. Central to this is the unbundling of traditional Environmental Water Reserve (EWR) for all It is expected to save 50 GL of water annually water rights into water shares, shares of delivery rivers. The EWR ensures water provided for the when completed at the end of 2009. Channel capacity and water-use licences. Unbundling of environment is protected under legislation. automation in the Macalister irrigation district water rights will commence in northern Victoria in Gippsland is saving 5 GL of water annually. Victoria has acted to improve the health of on 1 July 2007. These reforms will facilitate Further work in the district is expected to save rivers of high community value through restoring the development of water markets and the a total of 15 GL of water annually. habitat, improving water quality and recovering movement of water to high value uses. water to improve environmental fl ows in stressed Victoria’s reliable system for storing and systems. These rivers include the Thomson, allocating water has provided water security Macalister, Goulburn, Broken, Wimmera, Glenelg for users in all but the worst year of infl ows in and the iconic Murray and Snowy Rivers. recorded history. Victoria’s irrigation reforms will ensure a thriving irrigation industry in the face This work to improve the health of our rivers will of drought and climate change. The further continue to underpin our efforts to secure our development of the Victorian Water Grid will water supplies while maintaining the integrity provide even more opportunities to gain greater and resilience of our rivers. value from our water resources.

Page 26 Securing Victoria’s future water supplies involves a multi-billion dollar investment to boost supplies. Details of the actions, investments and 5 timing are as follows.

Investment and pricing Investing in the Water Grid The signifi cant costs associated with providing The costs associated with regional water more water for Melbourne will be paid for by projects will be paid for by regional water the Melbourne water companies and passed authorities and passed on to customers through on to customers through water charges. This is water charges. However, regional customers consistent with current practice, and with water may also need support to limit the price impacts pricing policy under the National Water Initiative. of major connections to the new Grid. The State has already funded major contributions Securing future supplies for Victoria, along to the Wimmera-Mallee pipeline, the Gippsland with continued investment to upgrade water Water Factory and the Goldfi elds Superpipe. infrastructure, will put increasing pressure on Consistent with these decisions, the State will water prices. The Essential Services Commission commit $10 million to the Hamilton-Grampians (ESC), the State’s independent pricing regulator, Interconnector and $20 million to the Melbourne- will determine the new water prices to cover the Geelong Interconnector. cost of the future supply projects for the next pricing period from 1 July 2008 to 2013. The water companies will release their draft pricing proposals in July/August and submit their fi nal Investing in irrigation modernisation Actions, Investments and Timing proposals to the ESC later this year. Prices will Irrigation modernisation will provide benefi ts be set by the ESC in the fi rst half of 2008. for irrigators, the environment, households and The Government expects the price increases industries. The Victorian contribution to the fi rst to be signifi cant. It is likely that the average stage of the Food Bowl Modernisation Project Melbourne water bill will double (in real terms) is $1 billion, with State Government funding by 2012. Melbourne water bills are currently of $600 million, along with contributions from low compared to other Australian cities and associated water authorities. The Government major Victorian regional centres. will consider setting up a purpose-built body to oversee the delivery of the project. This will reinforce to water users the true value of water, and will support continued efforts to save water. A program of concessions on bills for water users is already in place. This program provides benefi ts to around a third of all Victorian households. The water concessions regime will be reviewed before the new prices come into effect.

Our Water Our Future The Next Stage of the Government’s Water Plan Page 27 Table 5.1 Typical water and sewerage bills in 2005/06 compared with other cities

Adelaide $720

Brisbane $627

Canberra $747

Darwin $725

Sydney $694

Perth $750

Melbourne $473

Source: National Water Commission and Water Services Association of Australia, National Performance Report 2005-06

Desalination Food Bowl Modernisation Project Sugarloaf Interconnector Work will begin on the desalination plant The Food Bowl Modernisation Project Steering Work will begin immediately to develop the immediately in order to supply water to Committee will be established later in 2007. It Sugarloaf Interconnector linking the Goulburn Melbourne by the end of 2011. Signifi cant will guide the further development of the project. River to Sugarloaf Reservoir in the Melbourne work has already been carried out to develop system. Tenders will be issued in 2008. The pipe The full modernisation project will take up to the desalination proposal. First steps involve will transfer an average of 75 GL per annum eight years. The fi rst savings will be available fi nalising design, gaining approvals, acquiring and will begin delivering water in the fi rst half of from 2010 for Melbourne. land, and reserving the pipe route. 2010. Work to upgrade treatment plant capacity at Sugarloaf Reservoir will commence in the A decision on delivery arrangements regarding same timeframe. whether the project will be delivered and operated by the private or public sector will be made in the second half of 2007, prior to tendering for construction of the project in 2008.

Figure 5.1 Desalination

Figure 5.2 Food Bowl Modernisation Project

Figure 5.3 Sugarloaf Interconnector

Page 28