Surface water

When compared to the previous year, in 2021-22:

• more water was available (33,014,512 ML compared to 22,304,578 ML in 2020-21)
• there was more water in storages (levels in Victoria’s major storages were 83% in June 2022 compared to 61% in June 2021)
• more water was allocated to users
• there were fewer restrictions on licensed diversions from unregulated streams (peak of 68 streams in February 2022 compared to 115 in February 2021)
• the same amount of desalinated water was produced (125 GL)
• slightly more water was diverted for consumptive uses (2,919,547 ML compared to 2,806,372 ML in 2020-21)
• more water was diverted for environmental uses (1,015,677 ML compared to 656,719 ML in 2020-21)
• there was an increase of nearly 76 GL in entitlement volume from 2020-21, mainly due to the GMW Connections Project delivering water savings to irrigators, retailers and the environment
• there was more trade of allocation and water shares, and slightly less interstate trade.

Table 1 below reports on the total available water, total entitlements and total use (consumptive and non-consumptive). In Victoria in 2021-22, 3,935,224 ML of surface water was taken for consumptive and environmental purposes (Table 1).

Total Victorian streamflows

Compared to the previous year, there was more rainfall in 2021-22 across most of the state, and most waterways received more streamflows.

The total annual streamflow volume for Victoria was 33,014,512 ML, 146% of the long-term average inflows received from 1975 to 2019. This is more than the volume in 2020-21, which was 22,304,578 ML, 99% of the long-term average.

 In 2021-22:

• 21 out of 29 river basins had higher annual streamflow volumes than in 2020-21
• 16 basins had above-average streamflows, compared to 11 basins in the previous year
• the Avoca basin was the driest basin compared to average, receiving 15% of the long-term average inflows
• the Snowy basin received the highest inflows compared to average: 3,820,977 ML, equivalent to 480% of the long-term average
• statewide, streamflow volumes were higher than 16 of the previous 18 years.

Melbourne system inflows

The annual natural inflows (excluding desalinated water) to Melbourne’s harvesting reservoirs in 2021-22 were 643,200 ML, 133% of the 30-year long-term average (482,639 ML, 1991-92 to 2020-21). This is slightly more than the volume of inflows received the previous year (603,695 ML, 125% of the 30-year long-term average).

Melbourne has received above long-term average inflows into storages for the last three years. However, inflows into storages have been below average in 15 of the past 20 years.

Regional storage levels

In 2021-22, regional storage levels:

• started the year at 59% in July 2021
• peaked at 88.7% in November 2021 (compared to 63.5% in October 2020)
• finished the year at 82.3% at end of June 2022 (compared to 59% in June 2021).

Melbourne storage levels

In 2021-22, total Melbourne storage levels:

• started the year at 1,357 GL (74.9%)
• reached a peak of 1,630 GL (90%) in November 2021 (compared to 65.2% in October 2020)
• finished the year at 1,573 GL (86.8%) at end of June 2022 (compared to 74.9% in June 2021).

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 below presents end-of-October storage levels as a percentage of storage capacity for Melbourne and selected major regional centres from October 2003 to October 2021.

At the end of October 2021, storages were between 87% and 99%:

• The regional storages were between 97% and 99%, higher than in the previous year when regional storages were between 83% and 93%.
• Melbourne storages were at 87%, higher than in the previous year when they were at 75%.

Seasonal allocations

As with the previous year, in 2021-22 seasonal allocations to high-reliability entitlements in all declared water systems reached 100%. This year, however, the Murray system received a 100% allocation to low-reliability entitlements – the first time since the introduction of the current entitlement products in 2007.

Opening allocations announced in July 2021 were similar to the previous year, low for almost all systems except Coliban, Werribee and Thomson/Macalister.

By February 2022, all northern and southern systems had received seasonal allocations of 100% high-reliability water shares. Low-reliability entitlements in the Murray, Broken, Bullarook, Thomson/Macalister and Werribee systems also received the maximum allocation of 100%.

Unregulated stream diversion restrictions

There were fewer unregulated streams with restrictions on licensed diversions in 2021-22 (Figure 7).

• The number of unregulated streams on restrictions and bans reached a peak of 68 in February 2022 compared to 115 in February 2021.
• There were 48 streams on restrictions at the end of 2021-22 compared to 30 at the end of 2020-21.

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 total volume delivered for the year to 30 June 2022 was 125 GL, a volume equivalent to 6.9% of Melbourne’s storage capacity, the same as the previous year.

Use by type

In Victoria in 2021-22, 3,935,224 ML of surface water was taken for consumptive and non-consumptive purposes.

2,919,547 ML was taken for consumptive uses, more than the 2,806,370 ML taken in 2020-21. This includes water used for:

• irrigation: 2,154,024 ML (55% of total use)
• urban and commercial: 608,769 ML (15% of total use)
• small catchment dams: 116,051 ML (3% of total use)
• power generation: 40,703 ML (1% of total use).

In addition to the consumptive use, 1,015,677 ML was delivered to the environment (26% of total use). This environmental use covers both in-stream and off-stream deliveries. This is more than the 656,719 ML delivered the previous year.

Table 4 below shows the total volumes of water supplied from river basins and used for the five different use purposes above.

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 holdersas at 30 June 2022. Visit the Water Register website for up-to-date information on bulk entitlements.

Changes to bulk entitlements

There were 9 minor amendments made to bulk entitlements in 2021-22:

• 29 December 2021 and 17 March 2022 – amendments to references to the storage manager were completed to reflect practical obligations/operations to 8 entitlements in the Goulburn, Loddon, Latrobe, Wimmera, Thomson, Maribyrnong, Hopkins and Wimmera basins as part of Storage and Resource Manager Appointment Review. Other minor text corrections were made. No entitlement volumes were changed.
• 2 June 2022– Bulk Entitlement (River Murray - Goulburn-Murray Water) Conversion Order 1999, Bulk Entitlement (River Murray – Flora and Fauna) Conversion Order 1999: minor amendments required as a consequence of the Operating Rule Change to Use of the Barmah-Millewa Forest Environmental Water Allocation (BMFEWA) Sustainable Diversion Limit (SDL) adjustment project.

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.

Irrigators’ share distribution as part of the Connections Project

Further changes to entitlements occurred as part of the Goulburn-Murray Water Connections Project, an investment in modernising water delivery infrastructure in the Goulburn-Murray Irrigation District. Following completion of on-ground works in October 2020, the irrigators’ share of the consequent water savings were allocated as entitlements in the Murray and Goulburn systems. In 2021-22, 93 GL of water shares were delivered to eligible irrigators from the water savings. There was a corresponding reduction in loss allowances.

In 2021-22, there was an allowable increase in entitlement of nearly 76 GL in entitlement volume from 2020-21 (Table 5 and Figure 10). This was mainly due to the GMW Connections Project delivering water savings to irrigators, retailers and the environment (see detail above).

Water available under entitlements

Total water available under entitlements represents the volume of water that was available to be taken in 2021-22. This item is the sum of: opening carryover, allocation issued and the net trade of water (trade in less trade out), less water lost to spill. Total water taken under entitlements represents the amount taken under these entitlements. Table 6 provides the volumes of water available and taken for 2021-22 and does not include water available and taken for unlicensed small catchment dams.

In 2021-22 (Table 6):

• there was 6,931,700 ML available, more than what was available than the previous year (6,285,483 ML)
• 3,816,114 ML was taken under entitlements (higher than the 3,358,785 ML taken in 2020-21).

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 due to the complex interaction of ecological processes and the seasonal variability of streamflows.

In 2021-22, at a state scale, water leaving river basins was higher than the previous year: a total of 27,155,480 ML left river basins compared to 18,021,371 ML in 2020-21.

As a percentage of total flows in basins, water leaving the basin was about the same as the previous year, with 82% reaching basin outlets in 2021-22 compared to 81% the previous year. 

At a basin scale, the proportion of total flows leaving the basin in 2021-22 increased in 18 of the basins compared to the previous year, decreased in seven basins and remained the same in two 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 three 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 $0. 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. Within-environment trades indicates trade between environmental water accounts, or $0 price trades between private and environment water accounts.

In 2021-22, a total of 3,579,136 ML of allocation was traded in Victoria, slightly more than the total of 3,360,465 ML traded in 2020-21.

Most of the allocation trade occurred in northern Victoria (3,564,636 ML), with small volumes traded in southern Victoria (11,469 ML) and western Victoria (3,031 ML). The volume of priced trades in northern Victoria was the highest on record in 2021-22: 1,223,953 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 43% of the total volume traded in 2021-22, higher than the previous year (these trades are $0 trades, primarily moving water between environmental water accounts).

Trade in northern Victoria

A total of 2,340,683 ML of $0 priced trade (non-environment zero priced trades and within environment trades) occurred in Northern Victoria in 2021-22. A total of 1,223,953 ML of priced trade (commercial trades) occurred in Northern Victoria in 2021-22 (Figure 12).

Trade between Vic, NSW and SA

Water trade between Victoria, New South Wales and South Australia 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 2021-22 (Figure 13):

• Victoria imported 97,526 ML of water from NSW, compared to 168,111 ML imported in the previous year
• Victoria exported 37,713 ML to SA, compared to 2,511 ML imported in the previous year
• there was 59,813 ML of net interstate trade into Victoria. This is a decrease from the net total of 170,622 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. 

There are two types of water shares:

• High-reliability water shares have priority to receive allocations based on available water resources.
• Low-reliability water shares only receive allocations when resource managers 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 2021-22, water share transfer across Victoria included (Table 9, Figure 14):

• 122,728 ML of high-reliability water shares transferring ownership; this is an increase from the previous year (101,838 ML)
• 49,823 ML of low-reliability water shares transferring ownership; this is an increase from the previous year (43,555 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 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 (take and use licence change of ownership) were the most common trade type.

In 2021-22, surface water take and use licence trading resulted in:

• 955 ML of unregulated surface water permanently traded. This is slightly less than the 1,043 ML in the previous year
• 3,611 ML of unregulated surface water temporarily traded. This is slightly more than the 3,548 ML in the previous year
• 10,703 ML of unregulated surface water traded as part of a land transfer. This is more than 8,254 ML in the previous year.