Sugarloaf Pipeline South-North Transfer Preliminary Business Case Summary Department of Environment, Land, Water and Planning

Sugarloaf Pipeline South-North Transfer

2 Sugarloaf Pipeline South-North Transfer Department of Environment, Land, Water and Planning

Introduction

During the Millennium Pipeline to provide water security The key questions asked in the Drought, made to towns and communities in both preliminary business case were: large investments in the directions. The work has shown that it is technically feasible to • What infrastructure is required state’s water security. The pump water north with additional for bi-directional pumping and Victorian Desalination works to existing infrastructure. It is it technically feasible? Project was commissioned, would require additional capital • How much water can be investment and it is an option that $1 billion dollars was pumped from the government will continue to invested in upgrading the system to the ? explore. Goulburn-Murray Irrigation • When can water be transferred District, and the water grid The primary benefits available by and where can it be used? was expanded, including sending water north through the building the Sugarloaf Sugarloaf Pipeline include: • Is the infrastructure financially viable? Pipeline. • supplying water to irrigators and private diverters to improve This document summarises the As a consequence of these agricultural productivity; key findings of the preliminary investments, the Victorian business case. Government has determined that • improving water security for up to an additional 75 gigalitres rural towns and urban centres (GL) per year be available for use connected to the water grid; in northern Victoria. This will support industry and farmers, • making water available to be particularly during dry conditions. traded to its highest value use; and The government made a commitment to consider the • enhancing the flexibility of the feasibility of using the Sugarloaf Victorian Water Grid.

Sugarloaf Pipeline South-North Transfer 3 Department of Environment, Land, Water and Planning

Existing systems and infrastructure

Melbourne System Goulburn System Sugarloaf Pipeline

The system is The Goulburn system delivers The 72km long Sugarloaf Pipeline able to deliver water to homes, water to towns, irrigators and runs from the Goulburn River near businesses, irrigators and public domestic and stock schemes Yea, south over the Great Dividing spaces across metropolitan across northern Victoria including Range near the Melba Highway to Melbourne and the surrounding communities near Shepparton, . It includes an centres including Geelong, Melton Bendigo, Rochester, Echuca and offtake from the Goulburn River and Sunbury and the South Boort. The system also provides with a 300 megalitres (ML) per Gippsland and Westernport environmental flows to priority day pump station at Goulburn regions. The system also provides waterways such as the Goulburn River, an additional 300 ML per environmental flows to priority and Murray rivers. Water can be day high-lift pump station to waterways such as the Yarra, transferred from the Goulburn pump water over the Great Thomson, Tarago and Werribee system to Melbourne via the Dividing Range, a Balance Tank rivers. Sugarloaf Pipeline. on the Great Dividing Range and a discharge chute into the Water is delivered to households, The Goulburn system main Sugarloaf Reservoir. The pipeline irrigators and businesses by water storage is Lake Eildon, which has system was designed to convey corporations including South East a storage capacity of 3,334 GL. water from north to south to Water, , Barwon The other significant storage is supply water from the Goulburn Water, Western Water, Gippsland the Waranga Basin, a 432 GL River to metropolitan Melbourne. Water, Westernport Water, South off-river storage from water Gippsland Water, Southern Rural diverted from the Goulburn River The pipeline was constructed Water and . at Goulburn Weir. Average annual during a time when Melbourne inflows to storages are was facing the potential of The Melbourne system has 10 approximately 3,287 GL per year entering into stage 4 water storages with a combined total and vary depending on seasonal restrictions. It was the only viable storage capacity of more than conditions. Average annual water option able to deliver a 1,812 GL. Average annual inflows to diversions in the Goulburn system substantial volume of water to Melbourne’s four major is approximately 1,638 GL. Melbourne in the relatively short harvesting storages (Thomson, timeframe required. Upper Yarra, Maroondah and O’Shannassy reservoirs) are Once the VDP was on line it was approximately 500 GL per year, envisaged that the pipeline would although they were much lower provide added flexibility for water during the Millennium Drought distribution across Victoria. This period 1997–2009 when average included retaining the water annual inflows declined to allocated to Melbourne in Lake approximately 380 GL per year. Eildon and redirecting it to other The system is also able to receive parts of Victoria. water from the Victorian Desalination Plant (VDP), which can supply up to 150 GL per year of high quality drinking water, and from the Goulburn System via the Sugarloaf Pipeline. In 2015–16 approximately 432 GL was used within the Melbourne system by households, industry and other water users. As Melbourne’s population increases into the future, the volume of water used is expected to increase.

4 Sugarloaf Pipeline South-North Transfer Darling River

Lindsay-Wallpolla Mildura Water grid Victoria Mulcra Islands

Hattah Lakes Murrumbidgee River

Lake Victoria Darling River Northern Mallee Lindsay-WallpollaNyah Mildura Water grid Victoria Pipeline Mulcra Islands

Lake Tyrell Swan HattahHill Lakes Murrumbidgee River

Department of Environment, Land, Water and Planning Northern Mallee Pipeline Nyah

Lake Tyrell Lake Lake Victoria Darling Swan Hill Albacutya River Gunbower Lindsay-Wallpolla Mildura Water grid Victoria Mulcra Islands Forest Lake Barmah-Millewa Albacutya Gunbower Forest Forest Hattah Lakes Barmah-Millewa Murrumbidgee River Forest Lake Lake Kerang Barmah Lake Murray Murray Hindmarsh Kerang Weir BarmahChoke Mulwalla Lake River Wimmera Mallee River Hindmarsh Weir Choke Broken Pipeline Northern Mallee Yarrawonga Mulwalla Wimmera Nyah Creek Pipeline Main Channel Lake Hume River Wodonga Lake Tyrell Echuca From SwanCampaspe Hill Snowy Hydro Wimmera Mallee River Loddon Broken Pipeline Weir Ovens KiewaYarrawonga Horsham Lake Creek Wimmera Albacutya Gunbower Shepparton River River WarangaForest Barmah-Millewa Main Channel Western King Lake Hume Loddon GoulburnForest Broken Traralgon Wodonga River Wimmera Channel Weir River River From Mackenzie Taylors RiverLake River KerangEchuca Barmah Lake Murray River Lake HindmarshMt Campaspe Weir Waranga ChokeEast Goulburn Mulwalla LakeRiver Dartmouth William Wimmera Mallee Snowy Hydro Bendigo Basin Main ChannelBroken Lake Buffalo Creek Pipeline Yarrawonga Wimmera Laanecoorie Creek River Main Channel Lake Hume River Reservoir Echuca Wodonga From Lake Campaspe Lake William Hovell Snowy Hydro Loddon River Rocklands LoddonEppalock Toolondo Channel Weir Lake Ovens Kiewa Lake WeirHorsham Tullaroop Lake Nillahcootie River River Toolondo Wartook Lonsdale Cairn Waranga Shepparton Reservoir Reservoir CampaspeWestern King Great Dividing Range Curran Loddon Goulburn Broken Traralgon Wimmera River Channel Weir River River Ovens Kiewa Fyans Mackenzie Taylors RiverReservoir River Horsham River Lake Mt Coliban WarangaGoulburnEast Goulburn River Lake Dartmouth Lake Creek William River Bendigo Basin Main Channel Lake Eildon Lake Buffalo River River Bellfield Creek Goldfields Laanecoorie Shepparton Reservoir Superpipe WarangaLake Lake William Hovell Rocklands Rocklands Eppalock Reservoir Toolondo Channel Lake Sugarloaf Lake TullaroopWestern Lake Nillahcootie Toolondo Wartook WhiteLonsdale Swan Cairn pipeline Broken King Reservoir Reservoir Curran Campaspe GoulburnUpper Great Dividing Range Traralgon Great Dividing RangeLoddon Reservoir Reservoir River Wimmera Fyans Coliban Lake Channel Goulburn River Yarra Creek Ballarat River Weir Lake Eildon River River Mackenzie Taylors Bellfield Goldfields Reservoir River SuperpipeGreenvale River Glenelg Rocklands Sugarloaf Lake Reservoir Lal Lal Reservoir To Western Reservoir Reservoir Bairnsdale River Lake Mt River Sugarloaf Glenmaggie Water Whitetowns Swan pipeline Lake Dartmouth Waranga EastUpper GoulburnThomson Great Dividing Range Reservoir Yarra Reservoir William Ballarat Reservoir BasinGreenvale Olinda Reservoir Main Channel Macalister Lake Buffalo Glenelg Sugarloaf Lake Melbourne To WesternMelbourneReservoir Bairnsdale River BendigoMoorabool River Lal Lal Reservoir Reservoir Glenmaggie River Geelong Water towns Creek Cardinia Yarra River Thomson Laanecoorie pipeline Reservoir Reservoir Olinda Reservoir Macalister Moorabool River Melbourne Melbourne To Gippsland ThomsonRiver River Geelong Tarago Reservoir Reservoir Cardinia Geelong pipeline Water towns Barwon Reservoir Lake William Hovell Downs Lake To Gippsland ThomsonTraralgon River Water towns Portland Borefield Barwon Geelong Wurdee DownsEppalockBarwon River Traralgon Portland Borefield South East Water Rocklands Boluc Wurdee Barwon River Reservoir Boluc South East Water Reservoir Korumburra Toolondo Channel Korumburra Anglesea Anglesea Lake Borefield Borefield To WesternportTo Westernport To WonthaggiTo Wonthaggi Lake Water towns and Inverloch Tullaroop West towns and Inverloch Lake Nillahcootie Toolondo Lonsdale Cairn West Barwon Reservoir Wartook Reservoir Victorian Reservoir Campaspe Desalination Reservoir Curran VictorianProject Great Dividing Range River Desalination Reservoir Project Fyans Coliban Lake Goulburn River Creek River Lake Eildon Bellfield Goldfields Superpipe River Channel Sugarloaf White SwanN Piped connection pipeline Drainage line/ephemeral stream Upper Great Dividing Range Reservoir Existing Sugarloaf Pipeline Yarra Ballarat Proposed Pipeline works Reservoir Catchment storage Greenvale Sugarloaf Glenelg Operational storage Lake Lal Lal Reservoir To Western Reservoir Reservoir Bairnsdale River Other lakes Glenmaggie WaterGroundwa townster extraction location Thomson Desalination plant Yarra River Living Murray Icon site Reservoir Weir Olinda Reservoir Macalister Moorabool River Towns Melbourne Melbourne River Geelong Tarago Reservoir pipeline Figure 1: Water Grid To Gippsland Thomson River Sugarloaf Pipeline South-North Transfer Water5 towns Barwon Geelong Downs Traralgon Portland Borefield Wurdee Barwon River Boluc South East Water Reservoir Korumburra Anglesea Borefield To Westernport To Wonthaggi Water towns and Inverloch West Barwon Reservoir Victorian Desalination Project Department of Environment, Land, Water and Planning

Key Findings and Benefits

1. What infrastructure is required for AY bi-directional pumping and is it technically feasible? HUME HIGHW KEY Existing Sugarloaf Pipeline The preliminary business case considered two Proposed pipeline extension options. The first was to take water from Sugarloaf Existing pipeline Reservoir and pump it to the Goulburn River. The infracstructure second was to take water from Olinda Reservoir, Seymour G O U downstream of , and pump it to the L B U R N Goulburn River. The merits of taking water from V A New pressure Y L A L W E reduction device H Olinda Reservoir were considered superior due to the Y IG H at discharge H I G H higher water availability of the storage. Melbourne H point A W D A N Water advised that approximately 100 GL per Y O RO A M annum could be reliably sourced from Olinda G OU Reservoir compared to approximately 12 GL per LBU RN RIV annum from Sugarloaf Reservoir. Taking water from ER Sugarloaf Reservoir would also require the Yea construction of an additional two pump stations and installation of 6 km of new pipeline. New modifications to pipe and valves and existing The volume of water available from Sugarloaf high-lift PS Reservoir is limited by existing demand from the

Melbourne system and the ability to transfer water to

Y

A W

it from other reservoirs within the Melbourne system. H HI G Olinda Reservoir has greater connectivity to the A LB E Melbourne system. M

This assessment found that bi-directional flows through the Sugarloaf Pipeline from Olinda Reservoir are technically feasible and would require the Whittlesea following new infrastructure: New high-pressure New 12.5 MW diving valve station • new 12.5 megawatt pump station; pump station at connection to at Gulf Road– Sugarloaf Pipeline Steeles Creek Road Existing Sugarloaf • a power upgrade at Yarra Glen; Maroondah Pipeline discharge Reservoir to Sugarloaf • 14.75km of new pipeline; Reservoir Yarra Glen Healesville • a high pressure divide valve station at the Sugarloaf Reservoir connection to the existing Sugarloaf Pipeline; Yarra River Crossing

• a new pipe over the Yarra River or under the Yarra YARRA RIVER River to connect Olinda Reservoir to the existing Sugarloaf Pipeline; New 14.75 km pipeline Olinda Reservoir • modifications to the pipe and valves at the existing Sugarloaf high-lift pump station near Yea; and Silvan Reservoir

• a pressure reduction device or station installed at MAP NOT TO SCALE the Goulburn River. Figure 2 Schematic of new infrastructure This new infrastructure is shown in Figure 2 (right). required

6 Sugarloaf Pipeline South-North Transfer Department of Environment, Land, Water and Planning

In addition, the assessment identified a number of 2. How much water can be pumped from the ecological, social and technical constraints that Melbourne system to the Goulburn River? would need to be addressed. The constraints include (but may not be limited to): The Sugarloaf Pipeline has a north to south transfer capacity of 300 ML per day. The south to north • general technical issues including site access, transfer of water through the Sugarloaf Pipeline positioning of the outlet to the Goulburn River and would be able to match the 300 ML transfer capacity discharge pressure at the outlet; without exceeding the pipeline pressure rating, provided the new pipeline and pump station are • planning approvals from local government and the appropriately sized and designed. It is technically Victorian Government; possible for a maximum of 109.5 GL to be pumped • alignment of new infrastructure impacting on from Olinda Reservoir to the Goulburn River native flora and fauna and ability to offset any (assuming 365 days of pumping and no outfall impacts; constraints in the Goulburn River). Total losses for water transferred from the Melbourne system to a • cultural heritage; northern customer (including evaporation, seepage and spills) are estimated to be approximately 15 per • geological suitability of identified sites for the cent. If water is transferred to the Murray River offtake at Olinda Reservoir, outfall to the Goulburn system, further losses could be expected. River, 14.75km pipeline and other new infrastructure; The Goulburn Simulation Model (GSM) is used in northern Victoria to simulate operational scenarios. • ability to access the power grid for the proposed The GSM was used to assess how much water the new pump station near Yarra Glen; Goulburn system can receive from the Sugarloaf Pipeline. The range of potential water volumes that • mechanical issues associated with the integration could be transferred and used in the Goulburn and operation of both the existing and new system is between 72.1 GL per year and 94.5 GL per infrastructure; year for historical climate and return to dry climate scenarios respectively. Under wetter scenarios the • need for Commonwealth approvals (e.g. volume is less than 72 GL per year. The model takes Environmental Protection and Biodiversity into account natural streamflows and the release of Conservation Act 1999); and water from Lake Eildon to meet downstream water • operational issues including commercial use demands, but does not take into account the arrangements and water accounting. water availability in the Melbourne system. Further modelling, using a combination of water availability in the Melbourne system and the GSM, The estimated capital cost of the infrastructure is has shown that the volume of water that could be $277 million based on recent market costs and a transferred north is more likely to be around 57 GL notional P50 cost estimate, which has 50 per cent per year on average. Transferring larger volumes certainty the price will not be exceeded based on would be difficult given water availability and available information. This includes cost allowances delivery constraints in both systems. for community consultation, detailed design, approvals, project management and contingencies. The current pipeline configuration would see water A full business case would be required to determine discharged directly into the Goulburn River near Yea. the final estimated cost following consideration of all This discharge would need to be timed to ensure that constraining issues and detailed design. it did not affect the health of the Goulburn River.

Further analysis is required to assess the full costs, Furthermore, there will be a limited period of time constraint mitigation and benefits of the proposed where the water will be available before Melbourne’s south-north water transfer via the Sugarloaf Pipeline. growth and potentially decreased rainfall and water supply reduces the volume of water available to be transferred to the north without further augmentation of the Melbourne System.

Sugarloaf Pipeline South-North Transfer 7 Department of Environment, Land, Water and Planning

3. When can water be transferred and where The above options have potential to benefit water can it be used? users in the Goulburn and/or Murray systems. Operational and water accounting rules would need Water transferred from south to north would flow to be prepared during the development of a full into the Goulburn River. Water would be re-regulated business case to further assess each option. and stored until needed by northern water users. Water from the Sugarloaf Pipeline could be: Using the GSM, a times series of results from 1990 to 2014 for the historical climate scenario was prepared • used to substitute water released from Lake Eildon (Figure 3). It shows months in which water from the when water demand is higher than natural inflows. south could be used in the Goulburn system when This would typically be in late Spring and early demand is sufficient (shown in the green columns) Autumn; and months in which there is potential for transfer and storage in Waranga Basin (shown in the blue • diverted into the East Goulburn Main Channel; columns). White columns indicate periods water could not be transferred. The simulated Lake Eildon • diverted to the Waranga Basin via Stuart Murray storage is presented to highlight that in a number of and Cattanach canals in years the basin does not the drought years from 1998 to 2009, storage in fill from natural inflows and used during the Waranga Basin may have been possible. irrigation season;

• transferred from the Goulburn system to the Murray system, when it is not able to be used in the Goulburn system; and/or

• transferred from the Goulburn system to the Murray system regardless of the Goulburn system demands.

3500 1 GL) 3000

2500

Potential transfer Eildon storage (

2000

1500

3 1000

2

500 1

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Year Potential transfer (Waranga storage) Potential transfer (Demand substitution) Eildon storage (GL)

Figure 3: Time series results of Historical Climate Model

8 Sugarloaf Pipeline South-North Transfer Department of Environment, Land, Water and Planning

4. Is the infrastructure financially viable? b) Strengthened viability of local industry

The current estimated capital cost of the Water is a primary input for economic activity. This infrastructure is $277 million. The financial analysis project may enhance the effective water availability, undertaken to date shows that the cost of Goulburn which is critical to irrigators and farmers. This project allocation water would need to be well above historic represents an opportunity to facilitate the continued levels for it to be economically viable. These growth of irrigated agriculture and regional conditions are only likely to be met with significantly employment. reduced water availability and only likely to be viable for non-interruptible, high value crops. For example, c) Environmental benefits allocation water prices in the Goulburn system would have to be consistently above $1,350 per ML for Water transfers from south to north may increase water transferred to provide a net benefit assuming quantities available for environmental flows. The the supply of desalinated water. While some potential benefits are dependent on the timing of individual trades have exceeded this threshold, when water would be delivered to the north: average monthly prices have not. • There is no benefit of pumping water north in The costs and value of externalities (environmental summer, as the Goulburn River already has high and social) have not been estimated or included in flows due to existing releases from Lake Eildon the financial analysis of the scheme. The (and tributary inflows) to meet irrigation externalities would need to have a net positive value requirements. In fact, additional flows are likely to of approximately $1,100 per ML of water transferred contribute to further negative environmental south to north and discharged into the Goulburn impacts on the Goulburn River. River in order for the scheme to produce a (median) economically positive result. • If water is pumped north during winter, there may be some environmental benefit, however in The extent of the potential external benefits is consideration of the volume of water which the limited by the volume of water that could be south-north scheme could deliver, in comparison transferred to and accepted by the Goulburn system. to the total water volumes already available in the The preliminary business case considers what Goulburn River, the benefits will not be significant. additional benefits could be generated and noted the following: Overall, the preliminary assessment determined there are currently no substantial environmental a) Augmented capacity in the water sector benefits arising from the south to north transfers.

The bi-directional feature of the pipeline would d) Improved amenities enable water to be transferred to where it is valued most and promote the efficient and effective use of Improved waterway health will boost the aesthetic the Victorian water market. and recreational values of northern Victorian. The liveability and tourist potential of the region could therefore be improved.

Given the high value of externalities that would be required in order to make the scheme positive on an economic basis, it is possible that other water security projects may be more favourable.

Sugarloaf Pipeline South-North Transfer 9 Department of Environment, Land, Water and Planning

Next steps

The preliminary business case recommends that pumping water from Olinda Reservoir to the Goulburn system be assessed against other potential strategic responses to improve water security. This is in line with the Government’s commitment to planning for a future that is likely to have reduced water availability due to climate change and increased water needs due to population growth. At present, the preliminary business case has identified a number of gaps and constraints that require further analysis and investigation as outlined above.

The Victorian Government remains committed to improving water security in northern Victoria and the broader water grid. The government will continue to work with water authorities and communities through the implementation of Water for Victoria, which may include further consideration of other bi-directional flow concepts or modifications to the Sugarloaf Pipeline.

10 Sugarloaf Pipeline South-North Transfer Department of Environment, Land, Water and Planning

Photo credit Photos courtesy of Craig Moodie, Goulburn Broken Catchment Management Authority, GWMWater, Melbourne Water and Department of Environment, Land, Water and Planning.

© The State of Victoria Department of Environment, Land, Water and Planning 2016

This work is licensed under a Creative Commons Attribution 4.0 International licence. You are free to re-use the work under that licence, on the condition that you credit the State of Victoria as author. The licence does not apply to any images, photographs or branding, including the Victorian Coat of Arms, the Victorian Government logo and the Department of Environment, Land, Water and Planning (DELWP) logo. To view a copy of this licence, visit creativecommons.org/licenses/by/4.0/ ISBN 978-1-76047-354-9 (pdf) Disclaimer This publication may be of assistance to you but the State of Victoria and its employees do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication. Accessibility If you would like to receive this publication in an alternative format, please telephone the DELWP Customer Service Centre on 136 186, or email [email protected], or via the National Relay Service on 133 677, www.relayservice.com.au. This document is also available on the internet at www.delwp.vic.gov.au

Sugarloaf Pipeline South-North Transfer 11 delwp.vic.gov.au