Surface water

When compared to the previous year, in 2022-23:

• more water was available (49,087,047 ML compared to 33,025,526 ML in 2021-22)
• there was more water in storages (levels in Victoria’s major storages were 92% in June 2023 compared to 84% in June 2022)
• more water was allocated to users
• there were fewer restrictions on licensed diversions from unregulated streams (a peak of 52 stream sections in March 2023 compared to 67 in February 2022)
• less desalinated water was produced (4.1 GL compared to 125 GL in 2021-22)
• a similar volume of water was diverted for consumptive uses (2,850,249 ML compared to 2,919,232 ML in 2021-22)
• less water was diverted for environmental uses (612,279 ML compared to 1,008,424 ML in 2021-22)
• there was an increase of around 103 GL in entitlement volume from 2021-22, mainly due to amendments as part of water recovery projects in Northern Victoria
• there was a similar volume of trade of allocation, less trade of water shares, and less net interstate trade into Victoria.

Table 1 reports on the total available water, total entitlements and total use (consumptive and environmental). In 2022-23, 3,462,528 ML of surface water was taken for consumptive and environmental purposes in Victoria (Table 1).

Melbourne system inflows

The annual natural inflows (excluding desalinated water) to Melbourne’s harvesting reservoirs in 2022-23 were 880,729 ML, 183% of the 30-year average (480,979 ML, from 1992-93 to 2021-22). This is more than the volume of inflows received the previous year (643,200 ML, 133% of the 30-year average).

 Melbourne has received above long-term average inflows into storages for the last 4 years. However, inflows into storages have been below the long-term average in 14 of the past 20 years.

Figure 3 below shows the annual inflows into Melbourne's primary harvesting storages (Maroondah, O'Shannassy, Upper Yarra and Thomson reservoirs).

Regional storage levels

In 2022-23, total regional storage levels:

• started the year at 84% in July 2022
• peaked at 99% in December 2022 (compared to 89% in November 2021)
• finished the year at 93% at end of June 2023 (compared to 84% in June 2022).

Melbourne storage levels

In 2022-23, total Melbourne storage levels:

• started the year at 1,573 GL (87%)
• reached a peak of 1,775 GL (98%) in November 2022 (compared to 90% in November 2021)
• finished the year at 1,660 GL (92%) at the end of June 2023 (compared to 87% in June 2022).

Storages in major urban centres

The total volume of water stored in Victoria’s major reservoirs has historically been at its highest following winter and spring inflows. Storage levels at the end of October are traditionally a good indication of water availability for the remainder of that year.

Figure 6 presents end-of-October storage levels as a percentage of storage capacity for Melbourne and selected major regional centres from October 2003 to October 2022.

At the end of October 2022, storages were between 94% and 98%:

• The regional storages were all between 94% and 97%, this was similar to the previous year when regional storages were all between 95% and 99%.
• Melbourne storages were at 98%, higher than in the previous year when they were at 87%.

Seasonal allocations

In 2022-23, seasonal allocations to high-reliability entitlements in all declared water systems reached 100%, the same as the previous year. This year however, all northern systems received a 100% allocation to low-reliability entitlements, making this the first time all northern Victorian systems have received a 100% seasonal determination for both high-reliability and low-reliability water shares since the creation of the current entitlement products in 2007.

Opening allocations announced in July 2022 were higher than the previous year in the northern declared systems. Opening allocations were the same as the previous year in the non-declared and southern systems, except for Werribee which opened lower.

By December 2022, all northern and southern systems had received seasonal allocations of 100% high-reliability water shares. All low-reliability entitlements in Victoria also reached the maximum allocation of 100% at this time; except in the Thompson/Macalister system, which received 100% in April 2023.

Unregulated stream diversion restrictions

There were fewer unregulated stream sections with restrictions on licensed diversions in 2022-23 (Figure 7).

• The number of unregulated stream sections under restrictions and bans reached a peak of 52 in March 2023 compared to 67 in February 2022.
• There were 43 stream sections on restrictions at the end of 2022-23 compared to 47 at the end of 2021-22.

Desalinated water

Water produced by the Victorian Desalination Project is transferred into Cardinia Reservoir and combined with water sourced from upstream catchments and reservoirs, including O’Shannassy Reservoir, Upper Yarra Reservoir and Thomson Reservoir.

The Minister for Water made a 15 GL water order for 2022-23. This order was cancelled part way through delivery and the total volume delivered for the year to 30 June 2023 was 4.1 GL, less than the previous year (125 GL).

Use by type

Table 4 represents the use of water in each basin. In some cases, these volumes differ slightly from the volumes of water taken under entitlements in each basin in Table 6. This is because Table 6 reports water taken under entitlements based on the source basin for each entitlement, while Table 4 reports water that was used within each basin. Some entitlements may source their water from one basin and then transfer it to be used in another basin. For example, in 2022-23 1,142 ML was transferred from the Goulburn basin to supply urban use in the Yarra basin. In Table 6, the 1,142 ML is reported in the Goulburn basin as a water taken under the entitlement, but in Table 4 the same volume is reported against the Yarra basin instead of the Goulburn. 

In 2022-23, 3,462,528 ML of surface water was taken for consumptive and non-consumptive purposes in Victoria (3,927,656 ML in 2021-22).

Of this, 2,850,249 ML was taken for consumptive uses, less than the 2,919,232 ML taken in 2021-22. This includes water used for:

• irrigation: 1,962,749 ML (57% of total use)
• urban: 682,056 ML (20% of total use)
• small catchment dams: 167,638 ML (5% of total use)
• power generation: 37,806 ML (1% of total use).

In addition to the consumptive use, 612,279 ML was delivered to the environment under entitlements (18% of total use). This includes both in-stream and off-stream deliveries. There was an additional 8,339 ML of managed passing flows delivered in 2022-23. This was less than the 1,015,677 ML delivered the previous year (1,008,424 ML under entitlements and 7,253 ML through managed passing flow deliveries).

Entitlement volumes

Entitlements provide the basis for how water is shared. The total volume of entitlements changes each year as new entitlements are issued or existing entitlements are modified.

All basins in the state have a cap, which limits the volume of water that can be allocated. In catchments that have reached the cap and allocated all available water within the limit, no new entitlements are created unless water savings are made, and so there is no net increase in entitlement volume. This cap and trade system means that the only way for a water user to get more entitlement is to purchase it from someone selling unwanted or unused entitlement.

Most basins in Victoria have reached their cap, and so only a minor change in the total statewide volume of entitlements on issue is likely to occur annually.

Here is the list of Bulk and Environmental Entitlement holders as at 30 June 2023. Visit the Water Register website for up-to-date information on bulk entitlements.

Amendments as part of water recovery projects in Northern Victoria

Further changes to entitlements occurred in 2022-23 as part of the GMW Connections Project, the GMW Water Efficiency Project and two investments in modernising water delivery infrastructure in the Goulburn-Murray Irrigation District (GMID). Following completion of on-ground works, the consequent water-savings were allocated as entitlements. These changes during the 2022-23 year include:

• adjustments to the total volume of bulk entitlements held by the Victorian Environmental Water Holder (VEWH) in the Campaspe, Goulburn, and Murray systems (net reduction of 856 ML)
• issue of 91 GL of bulk entitlements from the Melbourne retailers’ share in the Murray and Goulburn systems
• changes to reflect the issuing of 9 GL of water shares as part of the irrigators’ share in the Goulburn, Murray, Loddon, and Campaspe systems
• changes to reduce the corresponding loss allowances underwriting water recovery in the Murray and Goulburn Systems.

Other amendments

Other changes to bulk entitlements include:

• name changes to all bulk entitlements held by Greater Western Water to reflect the integration of City West Water and Western Water, and to amalgamate Greater Western Water’s two Greater Yarra system - Thomson River pool bulk entitlements into one
• changes to reflect the conversion of water shares held by GMW into a bulk entitlement by adding 14.6 ML of high-reliability entitlement to the volume of water available for the Mitiamo Waterworks District in the Goulburn system
• changes to reflect the new Melbourne Water storage manager appointment across all Melbourne system bulk entitlements.

 All changes to bulk entitlements are administered under part 4, division 1 of the Act and require consultation and consideration of matters including the impact on current users and the environment.

Water available under entitlements

Table 6 represents the total volume of water that was available, and taken, under entitlements in each basin in 2022-23. The volumes for each basin will differ from Table 4, where the volumes represent the use of water in each basin. Some entitlements may source their water from one basin and then transfer it to be used in another basin. For example, in 2022-23, 571 ML was transferred from the Kiewa basin to supply Beechworth in the Ovens basin. In Table 6, the 571 ML is reported in the Kiewa basin as water taken under the entitlement, but in Table 4, the same volume is reported against the Ovens basin where the water was used.

The total available water volume in Table 6 is the sum of: opening carryover, allocation issued and the net trade of water (trade in less trade out), less water lost to spill.

Table 6 shows that in 2022-23:

• there was 6,610,602 ML of water available (less than the 6,931,700 ML available in 2021-22)
• there was 3,340,785 ML of water taken under entitlements (less than the 3,852,942 ML taken in 2021-22).

Water leaving the basin is water that flows out of basins at their downstream ends. This includes all water flowing through the system, excluding diversions and losses. In terms of water for the environment, it includes managed environmental water delivered in-stream, obligations on consumptive entitlements (such as passing flows) and above cap water. This water flowing through the system provides environmental, social, recreational and cultural benefits.

Although water leaving the basin provides environmental benefits, the proportion of flows leaving Victorian river basins is not in itself a reliable indicator of river health. This is due to the complex interaction of ecological processes and the seasonal variability of streamflows.

In 2022-23, at a statewide scale, water leaving river basins was higher than the previous year. A total of 41,595,780 ML left river basins compared to 27,155,480 ML in 2021-22.

As a percentage of total flows in basins, water leaving the basin was about the same as the previous year, with 85% reaching basin outlets in 2022-23, compared to 82% the previous year.

At a basin scale, when compared to the previous year, the proportion of total flows leaving the basin in 2022-23 increased in 19 basins, decreased in 3 basins and remained the same in 5 basins.

Allocation trade

Allocation is water available each season under water entitlements. Water is allocated based on the availability of water in any given year. These water allocations can be traded subject to trade rules.

Allocation trade has been broken down into 3 categories:

1. Commercial trade indicates a normal trade, with water transferred between water accounts at an agreed price.
2. Zero-priced trade indicates a movement of water to another account for zero dollars. These trade applications may indicate a trade between accounts owned by the same person, between related parties as part of an entitlement transfer, a contractual lease, or carryover parking return.
3. Environmental trade indicates trade between environmental water accounts, or zero-priced trades between private and environment water accounts.

In 2022-23, a total of 3,631,717 ML of allocation was traded in Victoria, a similar amount to the total of 3,579,136 ML traded in 2021-22.

Most of the allocation trade occurred in northern Victoria (3,620,967 ML), with a small volume traded in southern Victoria (10,750 ML) and no allocation traded in western Victoria. In 2022-23, the volume of priced trades in northern Victoria was the highest on record: 1,369,298 ML. This is consistent with the trend of increasing allocation trade since 2007-08. 

Environmental water holders are significant participants in the water allocation market, using trade to move water across Victoria. These organisations, primarily the Victorian Environmental Water Holder (VEWH) and the Commonwealth Environmental Water Holder (CEWH), aim to sustain healthy ecosystems and waterways. Environmental trade made up 37% of the total volume traded in 2022-23, lower than the previous year. These trades were zero-priced, primarily moving water between environmental water accounts.

Trade in northern Victoria

A total of 2,251,669 ML of zero-priced trade (non-environment zero priced trades and environmental trades) occurred in northern Victoria in 2022-23. A total of 1,369,298 ML of priced trade (commercial trades) occurred in northern Victoria in 2022-23 (Figure 12).

Trade between Vic, NSW and SA

Water trade between Victoria, New South Wales (NSW) and South Australia (SA) is permitted subject to trading rules. Victoria has tended to be a net importer of water over the past decade, largely due to the high demand from irrigators in the lower Murray. Flooding and extremely wet conditions in Victoria in 2011-12 and 2012-13 led to the net export of water from Victoria to NSW, as did extremely dry conditions in NSW in 2017-18 and 2018-19.

In net terms during 2022-23, excluding within-environment trade(Figure 13):

• Victoria imported 13,158 ML of water from NSW, compared to 97,526 ML imported in the previous year
• Victoria imported 28,729 ML from SA, compared to 37,713 ML exported in the previous year
• there was 41,887 ML of interstate trade into Victoria. This is a decrease from the net total of 59,813 ML into Victoria in the previous year.

Water share transfer

Trade of water shares represents a trade of ongoing annual water entitlements in declared systems. Most of the state’s regulated water systems have been declared.

Water shares can be high-reliability or low-reliability:

• High-reliability water shares have priority to receive allocations based on available water resources
• Low-reliability water shares only receive allocations when managers of the resource have allocated 100% high-reliability water shares and there is confidence that future water commitments won’t be compromised. Low-reliability water share accounts are often used to carry over allocations from previous seasons.

From 2009-10 to 2011-12, large volumes of water shares were transferred to the Commonwealth Environmental Water Office as part of buyback programs under the Basin Plan, resulting in much higher overall transfer volumes.

In 2022-23, water share transfer across Victoria included (Figure 14 and Table 9):

• 89,101 ML of high-reliability water shares transferring ownership; this is a decrease from the previous year (122,728 ML).
• 47,497 ML of low-reliability water shares transferring ownership; this is a slight decrease from the previous year (49,823 ML).

Unregulated surface water trade

Outside declared water systems, take and use licences allow water to be taken from either unregulated surface water systems or from groundwater, and to be used subject to the conditions defined in the licence.

Unlike allocation and water share trading, most of the surface water take and use licence trading occurred in southern Victoria, with very small volumes traded in the west of the state. Trades as part of land transfers were the most common trade type. 

In 2022-23, surface water take and use licence trading resulted in:

• 868 ML of unregulated surface water permanently traded (not as part of a land transfer). This was slightly less than the 955 ML permanently traded in the previous year
• 3,144 ML of unregulated surface water temporarily traded. This was less than the 3,611 ML temporarily traded in the previous year
• 11,634 ML of unregulated surface water traded as part of a land transfer. This was similar to 10,703 ML traded as part of a land transfer in the previous year.