melbourne's water situation: the opportunity for diverse solutions

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Melbourne’s water situationThe opportunity for diverse solutions

Philip Wallis, Bob Birrell, Dave Griggs,

Ernest Healy, John Langford, Janet Stanley

Report 09/2

November 2009



Melbourne’s Water Situation

The opportunity for diverse

solutions

REPORT 09/2

November 2009



Page ii

Produced by the Monash Sustainability Institute The Monash Sustainability Institute (MSI) delivers solutions to key sustainability challenges through

research, education and action. For government, business and community organisations, MSI is a

gateway to the extensive and varied expertise in sustainability research and practice across Monash‟s

faculties and research institutes. Our research covers the many areas of water, energy, climate

change, transport and urban design and biodiversity as solutions are found in a cross-disciplinary

approach of the social sciences, economics, law, health, science and engineering.

November 2009

ISBN: 978-0-9806387-1-4

© Monash Sustainability Institute, 2009 Authors:

Philip Wallis

Bob Birrell

Dave Griggs

Ernest Healy

John Langford

Janet Stanley

To be cited as: Wallis, P., Birrell, R., Griggs, D., Healy, E., Langford, J., and Stanley, J. (2009)

„Melbourne‟s water situation: the opportunity for diverse solutions.‟ Monash Sustainability Institute

Report 09/2 , Melbourne.

Monash Sustainability Institute

Building 74, Clayton Campus

Wellington Road, Clayton

Monash University

VIC 3800 Australia

Tel: +61 3 990 59323

Fax number +61 3 990 59348

Email: [email protected]

DISCLAIMER:

Monash University disclaims all liability for any error, loss or consequence which may arise from you

relying on any information in this publication.



Page iii

Contents

Glossary .............................................................................................................................. iv Water measurements .......................................................................................................... iv 1. Summary ....................................................................................................................... 1

1.1. Overview ................................................................................................................. 1 1.2. Major points ............................................................................................................. 2 1.3. Major recommendations .......................................................................................... 3

2. Introduction ................................................................................................................... 4 2.1. Present and future planned source of Melbourne‟s water ........................................ 4 2.2. Planning for Melbourne‟s water ................................................................................ 5 2.3. Observed storage levels .......................................................................................... 7

3. Short-term water situation ......................................................................................... 10 3.1. Department of Sustainability and Environment 2008 analysis ................................ 10 3.2. The outlook for 2009/10 ......................................................................................... 11

4. Long-term demand and supply issues ...................................................................... 12 4.1. Demand scenarios ................................................................................................. 13

4.1.1.

Population estimates ...................................................................................... 14

4.1.2. Total water use to 2051 .................................................................................. 14 4.2. Water supply .......................................................................................................... 15 4.3. Supply-demand projections ................................................................................... 16

4.3.1. Other considerations and assumptions ........................................................... 17 4.3.2. Supply-demand projection: medium average inflows (380 GL) ....................... 18 4.3.3. Supply-demand projection: low average inflows (300 GL)............................... 19 4.3.4. Implications of long-term supply-demand projections ...................................... 20

5. The long term outlook ................................................................................................ 20 5.1. Supply-oriented options ......................................................................................... 21 5.2. Demand-oriented options....................................................................................... 22

5.2.1. Criteria for managing the demand for water .................................................... 22 5.2.2. Reduction in rate of population growth ............................................................ 23 5.2.3. Tightening water use restrictions .................................................................... 23 5.2.4. Price increases ............................................................................................... 24 5.2.5. Appeals for conservation ................................................................................ 24 5.2.6. Enforced efficiencies....................................................................................... 25 5.2.7. Knowledge dissemination and social marketing .............................................. 26 5.2.8. WaterSmart .................................................................................................... 26 5.2.9. Smart metering ............................................................................................... 26 5.2.10. Assistance to low income households............................................................. 27

6.

Conclusions ................................................................................................................ 27

7. References .................................................................................................................. 28 Appendix A ......................................................................................................................... 29



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Glossary

Desalination Production of potable water from seawater by removing salt

Full supply level Total capacity of Melbourne‟s supply storages (1,810 GL in July

2009)

Inflows Water inputs from streams feeding major water harvestingstorages

Potable water Water fit for human consumption

Southern Oscillation

Index

A measure of seasonal fluctuations in air pressure in tropical

pacific and has important consequences for weather around the

globe

TFR Total fertility rate

Trigger levels Water storage level at which a change to, or between, water

restrictions is recommended

Water measurements

1 gigalitre (GL) = 1,000 megalitres or 1,000,000,000 litres

1 megalitre (ML) = 1,000,000 litres (L)

1 US gallon = 3.78 litres



Page 1

1. Summary

1.1. Overview

Drier and warmer climatic conditions are predicted for south east Australia. The frequency

and magnitude of rainfall events, particularly in late autumn is already exhibiting signs of a

shift to a drier climate. Late Autumn rainfall (Figure 1) has decreased over south east

Australia in recent years (Cai and Cowan, 2008a). A recent climate report presented a range

of greenhouse gas emission scenarios, based on IPCC methodology, and projected warmer

and drier climatic conditions for south eastern Australia (CSIRO, 2007). As a consequence,

increased frequency of drought and increased fire weather risk are predicted. Regional

drying appears to have been occurring for over 40 years (Cai and Cowan, 2008b).

Figure 1 Late Autumn rainfall has

decreased over south east

Australia in recent years (Source:

adapted after Cai and Cowan,

2008a)

The south west of Western Australia has already experienced a step change to a drier

climate that has persisted for over 30 years, which is consistent with the model predictions

that the mid latitude climatic systems that bring rain to southern Australia will shift south

reducing the rainfall. The possibility that south east Australia is experiencing a step-change

to a drier climate has substantial implications for water availability and highlights the need to

insure against this.

This report presents a review of the future levels of Melbourne‟s water supplies in the contextof the latest levels of water supply and demand (as of November 2009). It projects water

demand based on various levels of per capita usage and population growth in Melbourne.

The long-term demand and supply outlook to 2051 is projected, encompassing the water

from the desalination plant which becomes operational in 2012. We explore the implications

of various supply outcomes, including a continuation of low rainfall conditions and various

water usage scenarios.

Options for reducing the demand for water are canvassed, including incentives to implement

efficiency, pricing adjustments, public campaigns, smart operating systems, and by limiting

population growth. These options need to be widely discussed with a view to large scale

implementation, in a context where the public is aware of the seriousness of the water

storage outlook. Options and their costs and benefits need to be more clearly defined and

provided to the public so the choices being made are clear.



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1.2. Major points

1. In handling the present emergency, aspirational environmental flows have been

foregone. Environmental flows in rivers have been reduced below sustainable levels

such as will result in long term loss of biodiversity and damage to ecosystems if these

were to continue or decline further.

2. The desalination plant and the Sugarloaf pipeline will supply Melbourne‟s medium

term water needs, thus it is crucial that these become operational as scheduled. At

this stage, there are no alternative water supply options that would provide the

amount of water necessary in the short-term (>200 GL/year by 2012).

3. In 10 to 12 years, with the present climate and population trends, storage levels will

again be on a downwards trend if there is a return to high per capita water use. With

the current high population projection and a return to high per capita water use after

the desalination plant comes on stream, storages could peak before 2020 under

medium inflows, or earlier under low inflows unless an ambitious water conservation

program is maintained. In the longer term if high population growth continues,additional supply will be necessary, despite low per capita water use. For example,

under current ABS population projections (Melbourne reaches 6.6 million by 2051)

and low per capita water demand, the storages risk being virtually empty by 2051.

4. Efforts in efficiency and demand management, as well as the effect of water

restrictions, have reduced total per capita water consumption in Melbourne from 500

L/p/day in the 80s to just over 250 L/p/day at present.

5. The recent change in water usage in Melbourne which now prevents or severely

restricts the watering of plants will alter the appearance and external environment of

Melbourne, previously marketed as a garden city. There needs to be open, informed

discussion about the choices that are being made in relation to this.



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1.3. Major recommendations

1. Sustainable environmental flows to the Yarra River must be restored and maintained

once the security of water storages is increased when the desalination plant and

Sugarloaf pipeline become operational.

2. Water efficiency and demand management programs should be maintained inperpetuity. A comprehensive program for demand management should be developed

with a review of cost effectiveness and estimates of water saved, and

recommendations about a process to manage a large-scale program in this area.

3. Planning should commence for water provision for Melbourne after the next decade,

defining a sequence of options that take into account whole-of-lifecycle costs

(including energy and externalities), and should contain a mix of both centralised and

decentralised options and be planned in the context of urban design and alternative

energy sources. There should be public discussion about the effective choices that

will be made.

4. Steps should be taken by the government to inform the community and collect public

opinion about the present state of environmental flows in Victoria and current

ecological losses due to low river flows. The Victorian Government should make

available information on the flows needed to restore/maintain ecosystems.

5. Begin engaging with community perceptions of indirect potable reuse. A water

treatment facility should be constructed at the Eastern Treatment Plant to supply

industry and golf courses, with the ability to be upgraded in order to treat water to

drinking quality. Demonstrate the production of drinking quality water on a pilot scale

and engage with the public about the potential to upgrade the plant for full indirect

potable reuse.6. Introduce a range of schemes including water pricing with built in equity principles,

social marketing schemes such as a WaterSmart program, an up-scaling of the water

saving plans for business and industry.



Page 4

2. Introduction

2.1. Present and future planned source of Melbourne’s water

Melbourne presently relies entirely on stored water (see Figure 2). The reservoirs and

capacities are as follows:

Thomson – 1,068,000 megalitres (ML)

Cardinia – 287,000

Upper Yarra - 200,000

Sugarloaf - 96,000

Silvan – 40,000

Tarago – 37,500

Yan Yean – 30,000

Greenvale - 27,000

Maroondah – 22,000

O‟Shannassy – 3,000

Total: 1,810,500 ML

Figure 2: Melbourne’s water storages

Source: www.melbournewater.com.au/images/water_storages/wss_map_lrg.gif accessed 1

June 09.

To augment Melbourne’s water supply, additional water sources are planned:

Re-commissioning of Tarago (Connected in June 2009) – 15 GL available annually.

The Sugarloaf Pipeline – 75 GL planned for annually (under construction).

A desalination plant – 150 GL annually (planned).

Extension of a suspension of environmental flows for the Yarra River and Thomson

River until July 2010 (Ker 2009a).



Page 5

2.2. Planning for Melbourne’s water

Melbourne is currently experiencing a water crisis. Since 1996, rainfall in Melbourne‟s water

supply catchments has fallen well below the historic pattern. Between October 1996 and May

2004, the Greater Melbourne Region experienced its lowest rainfall on record in comparison

with all other periods of similar duration (CSIRO 2005: 3). As Figure 3 shows, the result has

been a sustained fall in average inflows to Melbourne‟s storages since 1997 to around just

377 GL per year. By comparison, the average inflow over nearly one hundred years was 608

GL per year (Figure 3).

Figure 3: Melbourne storage inflows 1913 to 2008 (calendar years)

Source: Modified after “Augmentation of the Melbourne Water Supply System”, DSE 2008, p. 5

Five official inquiries into Melbourne‟s water supply have taken place over the last decade.

The first was prepared by the Water Resources Strategy Committee for the Melbourne area,

established by the Victorian Government in October 2000. This inquiry pre-dated the water

crisis, with the Committee‟s recommended strategy stating that with significant demand

reduction by 2050, Melbourne would require only 571 GL per year from the catchmentsinstead of a projected 659 GL per year without demand management. This represented a

decrease in per capita usage from the 1990s average of 423 L/p/day down to 327 L/p/day in

2050. The population assumption was that there would be an increase from 3.5 million in

2001 to a projected 4.6 million by 2050 (Water Resources Strategy Committee, 2002).

Overall, the strategy highlighted increased climate variability (but not the dramatic step-down

that was to come), increasing population (but underestimated the increase by approximately

2 million people by 2050) and a preference for demand reduction over supply increase. In the

meantime, the Victorian Government‟s White Paper, Our Water Our Future: Securing Our

Water Future Together , was released in 2004 and set out key water policy. This policy was

based on (1) balancing water supply and demand (2) reducing water consumption (3) usingalternative supplies including recycled water, grey water and stormwater and (4) using

existing water supplies more effectively by interconnecting water systems.



Page 6

The second inquiry was a study of the implications of climate change on Melbourne‟s wa ter

supplies, conducted by the CSIRO and Melbourne Water and published in 2005. A major

finding was that streamflows would be reduced by as much as 7% to 35% by 2050, with a

mid-range reduction of 20% (CSIRO 2005: v).

The third inquiry, the Central Region Sustainable Water Strategy, was published as a

discussion paper in October 2005, a draft strategy in April 2006 and as a final report in

October 2006 and defined a water strategy for Melbourne and its surrounds, including West

Gippsland, Port Phillip and Westernport (Victorian Government 2006a). This strategy was

consistent with earlier policies of water conservation and efficiency. However, as the strategy

was based on the assumption that low inflows would continue, large scale augmentation of

water supplies, namely an upgrade of the Eastern Treatment Plant to produce recycled

water, was proposed.

By the time the fourth inquiry commissioned by the Victorian Government, the Water Supply-

Demand Strategy for Melbourne, reported in late 2006, the supply situation had deteriorated

and water restrictions had already been introduced (Victorian Government 2006b). This

report was not confident that the historic rainfall pattern would return and that the post-1996drought was part of natural climate variability. It predicted a partial return to the historic

pattern of rainfall (Victorian Government 2006b). Nevertheless, their core supply assumption,

which is represented by the „long-term average inflows‟ line shown in Figure 4, was that there

would be a gradual decline in inflows to Melbourne‟s water catchments, which reflected the

judgement of the 2005 CSIRO study.

Figure 4: Baseline supply-demand forecast

Source: Melbourne Water, Water supply-demand strategy for Melbourne, 2006-2055, Victorian

Government 2006b: 25.

The baseline demand assumptions incorporated into Figure 4 were that per capita demand

would remain at the level prior to the introduction of water restrict ions and that Melbourne‟s

population (as with the first inquiry) would increase to 4.6 million by 2050. As Figure 4

indicates, under the long-term average inflow assumption, demand for water would exceed

supply by around 2020. At the time the report from this fourth inquiry was being prepared,

Melbourne catchments were experiencing record low inflows during the winter and spring of



Page 7

2006 (an El Niño year). This prompted the authors to include a „low inflows‟ scenario (Figure

4), which assumed that there would not even be a partial return to the historic rainfall pattern.

Instead, the inflow would stabilise at the average of the period of 1997 to 2005, or about 385

GL per annum. Should this outlook come to pass, it was obvious that Melbourne‟s storages

would rapidly be depleted. In such circumstances, the report recommended examining a

range of water conservation measures as well as supply augmentation possibilities,

suggesting stormwater, groundwater, recycled water and desalinated seawater as possibleoptions (Victorian Government 2006b: 41). However, the inquiry report was required to work

within the framework of „no new dams for Melbourne‟; „water cannot be traded between

Melbourne and northern Victoria‟; and „no water recycling for drinking purposes in the short

to medium term‟ (Victorian Government 2006b, 3).

After a year of some of the lowest rainfall recorded in Melbourne, an update on the Victorian

Government‟s Our Water Our Future 2004 water policy, entitled Our Water Our Future: the

Next Stage of the Government’s Water Plan, was released in June 2007 and outlined a

series of new major water projects for Victoria (DSE 2007a). These included a desalination

plant for Melbourne, irrigation modernisation in Victoria‟s North, a pipeline (the Sugarloaf

Pipeline) linking water supplies from the Goulburn River to Melbourne, an upgrade of the

Eastern Treatment Plant for provide recycled water and new water conservation programs

(DSE 2007a). In total, 240 GL of new water supplies would be delivered to Melbourne by

2011 via desalination (150 GL), irrigation modernisation/Sugarloaf Pipeline (75 GL) and

recommissioning of the Tarago Reservoir (15 GL). A 2008 report by DSE described in more

detail how the planned augmentations would secure Melbourne‟s water supply and

emphasised the critical need for the desalination plant for Melbourne‟s supplies in the short-

term (DSE 2008).

A fifth inquiry into Melbourne‟s future water supply was conducted by the Environment and

Natural Resources Committee of the Parliament of Victoria. In his foreword to the report,

committee chair the Hon John Pandazopoulos remarked that “by 2036 Melbourne‟s water

supplies will require further augmentation” (ENRC 2009: xvii) , in addition to the

augmentations outlined in the 2007 plan. The inquiry report, released in June 2009, outlines

the recommendations of the committee, including an emphasis on mandatory water efficient

fixtures, a sustainability rating system that includes water efficiency, strong water recycling

targets and mandatory dual-pipe systems in new developments. However, the report utilised

the same out-of-date catchment inflow projections used in the 2006 supply-demand inquiry

and the 2008 DSE report.

2.3. Observed storage levels

The projected water storage levels reported in the 2006 supply-demand inquiry have since

been overtaken by events. The year 2006 resulted in the lowest annual inflow into the

catchments servicing Melbourne‟s dams for the 83 years of comparable records. Only 165

GL flowed into Melbourne‟s storages in the 2006 calendar year. As a result, in just one year

the water stored in the catchments fell from around 60% of capacity in December 2005 to

40% in December 2006, followed by a further decline to 30% by July 2007 (Figure 5).



Page 8

Figure 5: Observed water storage levels for Melbourne, July 1996 to November 2009. Observed

Southern Oscillation Index (SOI) July 1996 to October 2009

-40

-30

-20

-10

0

10

20

30

40

0

10

20

30

40

50

60

70

80

90

100

J ul y / 1 9 9 6

J ul y / 1 9 9 7

J ul y / 1 9 9 8

J ul y / 1 9 9 9

J ul y / 2 0 0 0

J ul y / 2 0 0 1

J ul y / 2 0 0 2

J ul y / 2 0 0 3

J ul y / 2 0 0 4

J ul y / 2 0 0 5

J ul y / 2 0 0 6

J ul y / 2 0 0 7

J ul y / 2 0 0 8

J ul y / 2 0 0 9

J ul y / 2 0 1 0

J ul y / 2 0 1 1

J ul y / 2 0 1 2

S t o r a g e v o l u m e / %

SOI July 1996 - November 2009

T a r a g o r e c o n n e c t e d

( 2 4 t h J u n e 2 0 0 9 )

N o r t h - S o u t h P i p e l i n e

( F e b r u

a r y 2 0 1 0 )

D e s a l i n a t i o n P l a n t

( D e c e

m b e r 2 0 1 1 )

Sources: Weekly water report archives, www.melbournewater.com.au accessed 16 November

2009; Bureau of Meteorology SOI archives, www.bom.gov.au accessed 16 November 2009.

Three periods of particularly low inflows in 1997/98, 2002/03 and 2006/07, played a major

role in the decline in storage levels detailed in Figure 5. These periods corresponded to El

Niño events, as indicated by negative values of the Southern Oscillation Index (SOI). The

SOI is derived from the seasonal fluctuations in air pressure in tropical pacific and has

important consequences for weather around the globe. An El Niño event causes rainfall as

warm water flows eastward and is associated with flooding in Peru and drought in Indonesia

and Australia. Current values of the SOI are negative and Central Pacific Ocean

temperatures are the highest seen since the El Niño of 2002 (BOM 2009a).

The Indian Ocean Dipole (IOD) is also thought to influence rainfall patterns over Australia.

Occurrences of positive values of the IOD are associated with below average winter-springrainfall, whereas negative IOD values are associated with above average winter-spring

rainfall (BOM 2009b). Currently, the IOD is positive and is predicted to remain so until June

2010 (BOM 2009c).

Melbourne‟s water usage has reduced significantly in recent years, as shown in Table 1. A

significant reduction in water demand has been achieved since 2002 through a combination

of water conservation and restrictions, which were prioritized in most of the strategy

documents referred to above.



Page 9

Table 1: Water use in Melbourne, showing July 1st

storage volume, percentage change in water

storages, annual usage of water and annual inflows

Year* Storagevolume(%)

Annualchange(%)

Annualusage(GL; % of 1990’s)

Annualinflows(GL)

Per capitadomestic useL/p/day (annAvg.)

2008/09 26.0 -3.6 370 (-26%) 285 1532007/08 29.6 -2.3 381 (-24%) 363 1612006/07 29.7 -15.9 410 (-18%) 165 1772005/06 48.0 -4.3 443 (-11%) 362 1952004/05 52.2 +3.2 440 (-12%) 492 2002003/04 48.9 +8.4 439 (-12%) 534 1992002/03 40.5 -10.0 479 (-4%) 303 2202001/02 50.5 +1.4 473 | 446 2172000/01 49.3 -1.3 505 | 497 2391999/00 50.0 -9.6 500 | Average. 366 2401998/99 58.4 -1.1 487 | 500 GL/year 442 2371997/98 59.5 -19.5 517 | 250 254

1996/97 76.1 -8.0 510 | 665 253Sources: DSE 2007b; Weekly water report archives, www.melbournewater.com.au

* Melbourne Water reporting year, 1st

July to 30th

June. Note: based on weekly reported data

The direct domestic component of water usage represents an average per capita daily

residential use of water during 2007-08 of around 161 litres. This is very close to the level

sought under the Victorian Government‟s recent water conservation campaign, Target 155,

which began in December 2008. This promotes direct domestic water conservation to bring

per capita consumption in Melbourne down to 155 L per person per day, which is

approximately equivalent to Stage 4 domestic restrictions. Despite consumption exceeding

155 L over the course of a hot and dry summer, the program appears to have been

successful to date, with Melburnians saving eight billion litres so far during 2009, compared

to 2008.

The decision to implement domestic water restrictions is made by the Minister for Water on

advice from the water industry and in accordance with the Drought Response Plan. Trigger

levels or changes between water restriction stages reflect the seasonality of inflows and

water demand, except for Stage 4 restrictions, which are based on proximity to minimum

operating storage levels (see table in Appendix A for Trigger levels). The Victorian

Government has delayed moving to Stage 4 domestic restrictions until November 2009,

instead hoping that Target 155 will achieve the same reduction in demand. After aboveaverage rainfall in September 2009, it would seem that Stage 4 restrictions will be avoided

for the foreseeable future.

Each stage imposes stronger restrictions on direct domestic water use, particularly for

domestic outdoor water use. The permanent water saving measures implemented in March

2005 require the use of trigger nozzles on hoses for outdoor watering and prohibit any hosing

down of paved areas. They also put conditions on filling new swimming pools and operating

rules for manual and automatic watering systems. Stage 4 requires no outdoor water use at

any time, whereas limited outdoor watering is allowed for Stages 1 to 3a.



Page 10

The seasonal pattern of consumption and the overall trend in total usage of water since July

1999 can be observed in Figure 6, plotted against a population increase from 3.4 million

people to 3.9 million people over the same time period.

Figure 6: Total weekly water demand (GL) and population growth for Melbourne, 1999 to 2009

3.0

3.2

3.4

3.6

3.8

4.0

0

2000

4000

6000

8000

10000

12000

14000

16000

J ul y / 1 9 9 9

J ul y / 2 0 0 0

J ul y / 2 0 0 1

J ul y / 2 0 0 2

J ul y / 2 0 0 3

J ul y / 2 0 0 4

J ul y / 2 0 0 5

J ul y / 2 0 0 6

J ul y / 2 0 0 7

J ul y / 2 0 0 8

J ul y / 2 0 0 9

J ul y / 2 0 1 0

P o p u l a t i o n / m i l l i o n p e o p l e

T o t a l w

e e k l y w a t e r d e m a n d / G L

Weekly water demand Population Pro jected population

Source: Weekly water report archives, www.melbournewater.com.au accessed 17 November

2009; Australian Bureau of Statistics, regional population growth Australia (cat. 3218.0).

3. Short-term water situation

3.1. Department of Sustainability and Environment 2008 analysis

The Department of Sustainability and Environment (DSE) released a report titled

Augmentation of the Melbourne Water Supply System, Analysis of Potential System

Behaviour in August 2008 that presented an analysis of the response of Melbourne‟s water

supply system to planned augmentations (DSE 2008). This analysis took into account

scenarios of recent low inflows and projections of future water demand based on the

population growth projections assumed by the State Government.

The analyses performed by DSE considered two flow scenarios: one based on 3-year inflows

(2004/05/06) and one based on 10-year inflows (1997-2006). The 3-year scenario with the

lower inflows was constructed in a repeating sequence of 2004 (508 GL), 2005 (392 GL) and

2006 (163 GL) inflows. The average inflows in this scenario are 355 GL per year. Planned

augmentations to the water supply system were modelled to start in late 2009 with the

reconnection of the Tarago Reservoir (providing 15 GL/year in a low-flow year), followed by

the Sugarloaf Pipeline (providing 75 GL/year) in the first half of 2010 and the Desalination

Plant in late 2011 (providing 150 GL/year) (DSE 2007b). The 10-year inflow scenario is

based on 1997-2007 historical inflows and 1913-1996 inflows adjusted down by 30% toaccount for a step-change in Melbourne‟s climate, with annual inflows averaging 425 GL per

year.



Page 11

Since the release of the DSE analysis, an additional year of well below average inflows of

285 GL has occurred in 2008/09. Taking into account the previous two years of inflow data,

the „recent‟ average inflows over the period 1997 to 2008 was 377 GL per year. This

represents a decrease on the long-term average that is closer to 38%, rather than the 30%

decrease as referred to in the DSE report.

3.2. The outlook for 2009/10

In 2009, Melbourne‟s main water harvesting catchments had experienced one of the driest

starts to a year on record (Figure 7). Above average rainfall in September and enhanced

inflows through October boosted water storages back up to 38.1% of capacity, which is

almost 5 per cent more than the same time last year (2008).

Figure 7: Victoria Rainfall deciles, 1 January to 30 June 2009.

Source: Australian Bureau of Meteorology, www.bom.gov.au accessed 12 November 2009.



Page 12

4. Long-term demand and supply issues

For the long-term (to 2050), the question is whether further supply augmentation measures

will be required, or whether continued demand management and efficiency measures can

achieve similar security of supply.

Water demand is a function of the number of people served and their per capita consumptionlevels. The 2002 and 2006 water inquiries cited earlier assumed that Melbourne‟s population

would increase to 4.6 million by 2050. Melbourne‟s population has surged since the early

part of this decade, primarily as a consequence of increased overseas migration, but also

because of an increase in fertility. If migration and fertility continue at the recent levels,

Melbourne will have to provide for a much larger population than was assumed in the

Victorian Government studies discussed earlier. The median-level projection of Australia‟s

population prepared by the Australian Bureau of Statistics and published in August 2008

assumed that recent fertility and migration trends will continue. In these circumstances

Melbourne‟s population will grow from 3.7 million in 2006 to 6.5 million in 2050 (ABS 2008).

Should this projected outcome occur, water will have to be provided for an additional 2.8

million people by 2050 rather than the one million assumed in the earlier reports. The scale

of the additional water needed will depend on the water consumption patterns of Melbourne

residents. During the last few years households and municipalities have largely had to forgo

their attachment to lawns, gardens, playing fields, street trees and parks which require

regular watering.

Additionally, environmental flows in rivers have been reduced below long term sustainable

levels such as will result in long term loss of biodiversity and ecosystems if they were to

continue. In the case of the Yarra, the mean annual flow in the reach below the Upper Yarra

Dam has been reduced by 95% of the original flow (Sinclair, Knight, Merz, 2005: 7). Theconsequence is that the channel below the dam has been reduced to a small active channel

with major changes to the terrestrial and aquatic river environment. Flows further down the

river have been reduced to around 40-50 % of natural flows. In 2006 the State Government

decided to marginally increase the environmental flows to the Yarra River. This decision was

reversed in 2007 as a consequence of the very low inflows to the catchment in 2006. The

environmental flows agreed to in 2006 should be returned once the supply augmentations

are completed, and should be taken into account in determining long term supply and

demand.

We present scenarios of Melbourne‟s water storage levels based on supply (inflows) and

demand (population and per capita use) to give a broad-brush account of long-term water supply. While in reality, many factors will influence the actual outcome; this analysis looks

only at broad likely trends.



Page 13

4.1. Demand scenarios

We present six long-term demand scenarios which involve three levels of domestic direct

water demand and two estimates of Melbourne‟s population to 2051 based on migration and

the fertility rate. These are:

Scenario 1 This scenario considers 155 L/p/day demand from July-2009 through to June-2051. This

scenario represents an ongoing program of demand management, including increased water

use efficiency and supplementing central water supply with local sources, such as rainwater.

This corresponds to a reduction of approximately 37% of the average level of residential

consumption seen in the 1990‟s.

Scenario 1a - net annual overseas and internal migration gain to Melbourne 38,200 –

total fertility rate of 1.8

Scenario 1b - net annual overseas and internal migration gain to Melbourne 18,600 –


Scenario 2

Per capita water demand starts at 155 L/p/day from July-2009 to June-2013 and then

increases to 200 L/p/day by July-2025, reflecting the increase in availability of water with the

new water sources. This policy is similar to that outlined in the Central Region Sustainable

Water Strategy and is a level of consumption which would allow a modest version of

Melbourne‟s detached house and garden lifestyle to be maintained. This corresponds to a

reduction of approximately 20% of the average level of residential consumption seen in the

1990‟s.

Scenario 2a - net annual overseas and internal migration gain to Melbourne 38,200 -

total fertility rate of 1.8Scenario 2b - net annual overseas and internal migration gain to Melbourne 18,600 -


Scenario 3

Per capita water demand starts at 155 L/p/day from July-2009 to June-2013 and then

increases to 250 L/p/day by July-2025. This scenario represents a lapse of water use

efficiency and a return to unrestricted watering of gardens, taking into account the hard-wired

efficiency savings already built into the system.

Scenario 3a - net annual overseas and internal migration gain to Melbourne 38,200 -


Scenario 3b - net annual overseas and internal migration gain to Melbourne 18,600 –


Total water demand (in GL) is calculated by taking the residential population, multiplying by

per capita water demand (L/p/day), multiplying by 365 days, converting to GL and then

dividing by 0.6 to include industrial use and system losses.



Page 14

4.1.1. Popu lation estimates

There are two population estimates, reflecting high and medium growth. High growth

assumes Melbourne‟s population grows from 3.9 million persons in 2008 to 6.6 million

persons in 2051, similar to the recent ABS projections. This high growth assumes that the

recent high level of overseas migration will be sustained over the forecast period, and that

this will result in an annual net movement to Australia of 180,000 per year of whichMelbourne will receive 24%. This figure includes a small annual net loss from Melbourne to

elsewhere in Australia of 5,000 per year. It is also assumed that fertility in Melbourne will

remain at the relatively high fertility rate of 1.8.

Under the medium growth estimate Melbourne‟s population increases from 3.9 million in

2008 to 5.2 million by 2051. Net migration to Australia and Melbourne is set at approximately

half the level of high growth (net 90,000 persons with Melbourne again receiving 24%) and a

slight decline in the fertility rate to 1.75.

4.1.2. Total water us e to 2051

Table 2 and Figure 8 show the water usage under the outlined scenarios to 2051.

Table 2: Population and annual water usage (GL)* projections for Melbourne under various

scenarios to 2051

2016 2021 2026 2031 2036 2041 2046 2051

L o w

w a t e

r u s e

Scenario 1a

High population 4,426,436 4,765,742 5,091,725 5,403,836 5,705,560 6,000,845 6,288,142 6,561,653

Water use 417 449 480 510 538 566 593 619

Scenario 1b

Med population 4,187,023 4,394,170 4,580,128 4,745,520 4,893,639 5,027,213 5,145,397 5,244,924

Water use 395 414 432 447 461 474 485 495

M e d i u m

w a t e r u s e

Scenario 2a

High population 4,426,436 4,765,742 5,091,725 5,403,836 5,705,560 6,000,845 6,288,142 6,561,653

Water use 448 536 619 657 694 730 765 798

Scenario 2b

Med population 4,187,023 4,394,170 4,580,128 4,745,520 4,893,639 5,027,213 5,145,397 5,244,924

Water use 423 495 557 577 595 612 626 638

H i g h

w

a t e r u s e

Scenario 3a

High population 4,426,436 4,765,742 5,091,725 5,403,836 5,705,560 6,000,845 6,288,142 6,561,653

Water use 481 633 774 822 868 913 956 998

Scenario 3b

Med population 4,187,023 4,394,170 4,580,128 4,745,520 4,893,639 5,027,213 5,145,397 5,244,924Water use 455 584 697 722 744 765 783 798

Source: Population projections by CPUR; projection series commencing 2006 using ABS Estimated Residential

Population, Series B Sept. 2008. * Water projections do not include environmental flows.



Page 15

Figure 8: Water demand scenarios of 1) low per capita water demand, 2) medium per capita

water demand and 3) high per capita water demand; with population scenarios a) high

population and b) medium population.

1a

2a

3a

1b

2b

3b

0

200

400

600

800

1000

1200

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

A n n u a l D e m a n d / G L

4.2. Water supply

We model two supply situations with a medium and low natural inflow to Melbourne‟s major

water storages in addition to projected levels of supply from augmentation projects (Figure

9). Environmental flows are not directly factored in, but are indirectly included in the system

losses component, which increases as a proportion of total use. The situations are as

follows:

Medium natural inflows

An average 200 GL of augmentation from Tarago, Pipeline and desalination from mid

2012. This assumes that the Sugarloaf Pipeline will not be operating at full capacity

for the period under consideration.

380 GL of annual average inflows, representing the average for the last ten years

Low natural inflows

An average 200 GL of augmentation from Tarago, Pipeline and desalination from mid

2012

300 GL of annual average inflows, representing the average for the last four years



Page 16

Figure 9: Water supply projections with medium and low inflows and augmentation after mid

2010

Augmented mediuminflows

Augmented low inflows

Low inflows

Medium in flows

0

100

200

300

400

500

600

700

800

900

1000

1 9 9 0

1 9 9 5

2 0 0 0

2 0 0 5

2 0 1 0

2 0 1 5

2 0 2 0

2 0 2 5

2 0 3 0

2 0 3 5

2 0 4 0

2 0 4 5

2 0 5 0

2 0 5 5

A n n u a l S u p p l y / G L

In summary, the augmented low inflows, totalling 500 GL/year, are less than what is required

for all but the lowest demand scenario (1b) shown in Table 2. This means that additional

sources of water would be required before 2050.

4.3. Supply-demand projections

This part of the report examines the implications of the demand and supply scenarios

developed above for water storage levels. Projections of supply levels for Melbourne‟s water

storages from July-2012 until June-2051 are shown below. For each set of projections, we

have identified positions where water supply will exceed demand until 2051 (white cells in

tables), where demand exceeds supply but without depleting storages to zero per cent (light

grey cells) and where water demand will exceed supply and storages would hypothetically bedepleted to zero per cent (dark grey cells).

The annual change in percentage system storage ( ΔS ) was calculated using the following

equation:

100

C

D I S S

i

Where;

S i - initial (previous year) supply level (GL)

I - annual inflows (GL) D - annual demand (GL)

C - system storage capacity



Page 17

4.3.1. Other con siderat ions and assump t ions

A number of other supply and demand elements have not been factored in to the calculations

presented in this report, or their values have been subject to certain assumptions, including

the following:

Demand elements:

Expansion of Melbourne water grid (e.g. connection to Geelong) not factored in

Restoration of environmental flows to levels agreed in 2006 not factored in

Additional environmental flows to the Thomson River not factored in

Yering pumping and weir harvests not factored in (estimated at 80-100 GL/year)

Supply elements:

North-South pipeline assumed to run at half capacity (35 GL/year)

Headworks environmental releases and spills not factored in (estimated at 80-100 GL/year)

We have assumed that the supply and demand elements listed approximately balance out

and do not significantly affect the overall result. The simplified modelling approach treats

Melbourne‟s water storages as one volume and does not consider non-linear responses,

such as emergency measures for extremely low storage levels. This analysis is intended as

a broad comparison between different levels of in f lows , populat ion and per-capita

demand .



Page 18

4.3.2. Supply -demand pro ject ion: medium average inf low s (380 GL)

Drop down lines have been inserted in Figure 10 and Figure 11 to indicate when Melbourne‟s

water storages reach 20 per cent of capacity. The purpose is to flag the time when the need

for action to act to limit demand or augment supply (or both) will become urgent. As is shown

in Figure 10 and Figure 11, this is usually several years before the storages would be fully

depleted.

Table 3: Percentage of storage capacity for supply-demand projections under medium average

inflows

Scenario

% of storage

capacity Year

1b (low per capita demand, medium population) 100% 2018 onwards

1a (low per capita demand, high population) 100% 2019 onwards

2b (medium per capita demand, medium population) 64% 2051

2a (medium per capita demand, high population) 0% 20433b (high per capita demand, medium population) 0% 2035

3a (high per capita demand, high population) 0% 2029

Figure 10: Projections of water supply levels under medium average inflows: 1) low per capita

water demand, 2) medium per capita water demand and 3) high per capita water demand; with

population scenarios a) high population and b) medium population.

1a

2a3a

1b

2b

3b

0

10

20

30

40

50

60

70

80

90

100

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

S u p p l y L e v e l / %



Page 19

4.3.3. Supply -demand pro ject ion: low average inf lows (300 GL)

Table 4: Percentage of storage capacity for supply-demand projections under low average

inflows

Scenario% of storagecapacity Year

1b (low per capita demand, medium population) 100% 2025 onwards

1a (low per capita demand, high population) 1% 2051

2b (medium per capita demand, medium population) 0% 2038

2a (medium per capita demand, high population) 0% 2029

3b (high per capita demand, medium population) 0% 2026

3a (high per capita demand, high population) 0% 2023

Figure 11: Projections of water supply levels under low average inflows: 1) low per capita water

demand, 2) medium per capita water demand and 3) high per capita water demand; with

population scenarios a) high population and b) medium population

1a2a3a

1b

2b3b

0

10

20

30

40

50

60

70

80

90

100

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

S u p p l y L e v e l / %



Page 20

4.3.4. Imp l icat ions of long-term supply -demand project ions

Should low average inflows eventuate, Melbourne‟s storages will be quickly depleted under

most of the scenarios considered. For example, under the high population and medium per

capita demand assumptions, there is a risk that the storages will be depleted by 2029. Under

this scenario (2a in Table 4), the drop down line indicates that storages will at 20 per cent of

capacity by 2024 (Figure 11). The low average inflow assumption of 300 GL (plusaugmentation from the Sugarloaf pipeline and the desalination plant) is plausible, as an

average inflow of 300 GL is more than occurred in 2006-07 and 2008-09.

The high population, high demand scenario (3a in Table 4) is of particular note should low

average inflows occur. The demand aspect of this scenario could occur if the Government

fails to actively maintain a conservation program. The government might be tempted to do so

after the additional water from the desalination plant becomes available. For this reason it is

important that some conservation measures are hard-wired into the system (e.g. low-flow

shower heads, washing machines and toilets). The population assumption is the same as

that projected by the Victorian Department of Planning and Community Development in its

Victoria in Future release of 2008. Under this scenario, the storages may peak (wheredemand exceeds supply) before 2020.

Should inflows return to medium levels before augmentation, that is 380 GL per year; the

situation is more comfortable. Under the low per capita demand scenarios the storages are

most likely to be full before 2020. These circumstances would raise questions about how the

Desalination Plant and the water network should operate once storages are full.

The supply-demand projections described above indicated that Melbourne needs to

immediately begin planning for either additional sources of water or some combination of

restraints to population growth and a strong demand management strategy.

5. The long term outlook

The long term scenarios to 2051 show that in the first few years after the desalinisation plant

comes on stream, Melbourne Water could remove all restrictions and/or return environmental

flows with little risk of water shortages, even under the high population assumption. However,

as early as 2020, if low inflows occur in a context of high population growth and high per

capita demand, the storages would peak and would require additional supplies to be brought

online before 2025. Under the medium flow scenario the peak in storage levels would be

more likely to occur after 2025, but new sources of water would be needed before 2030.

It is not proposed that any of these outcomes will actually occur. Should medium or low

inflows from the water catchments continue, future governments would have to act well

before the storages are empty. Rather, the scenarios indicate that under some plausible

assumptions, and even with the augmentation of water supplies from the Sugarloaf pipeline

and desalinisation plant, the Victorian Government will have to start planning now to deal

with inflows scenarios that are lower than the long-term average. This planning will have to

involve further augmentation of the water supply and/or a reduction in the projected demand

for water.

These new circumstances have arisen because of unforseen developments on the demandand supply side of the water equation. On the demand side, the recent surge in Melbourne‟s

population, if sustained, will add some 2.8 million extra consumers between 2006 and 2051



Page 21

rather than between 1 to 1.5 million as was assumed just a few years ago. On the supply

side, the climate change trends have raised the possibility of low flows continuing over the

long term.

The climate change trend has delivered several low inflow years, including just 165 GL in the

2006 calendar year and 287 GL in the 2008 calendar year. As indicated, the Victorian

Government has stated that it intends to remove water restrictions after the Desalination

Plant is operational. Also, the Government‟s most recent population projections are

consistent with the high population assumption included in our modelling.

In this final section of the report we examine some of the options available to achieve a

reduction in per capita demand for water. We do not consider supply-side options in detail.

This is not to say that they will not be part of the Government‟s response to the water supply

crisis the scenarios depicted above indicate could occur. There are serious environmental

costs associated with some supply side solutions, as would be the case should a further

desalinisation be built or a dam constructed on another stream, the most likely being the

Mitchell river. The financial costs of such responses are also steep, as Victorian consumers

will discover when the high price of water from the desalinisation plant is factored into their water bill.

5.1. Supply-oriented options

As noted, this report will not consider alternative water supply options in any detail, except to

point out the cost of supply options relative to demand-oriented options, which is

demonstrated in Figure 12. This figure shows that demand management is one of the most

consistently low-cost solutions to meeting water needs on a per-kilolitre basis. In contrast,

other supply-side options such as rainwater tanks, long-distance pipelines and water recycling can, in some instances, generate much higher costs per kilolitre. For example, the

least expensive rainwater tank example would have cost $2.15 per kL, whereas the most

expensive example of rainwater tanks provided water at $12.30 per kL. This highlights that a

range of supply-side options are required to deal with local variation, such as in the more

elevated regions of Melbourne where water pumping costs might increase the cost of

centralised supply and make decentralised options more cost-effective.

In planning for water provision for Melbourne after the next decade, any options considered

should take into account whole-of-lifecycle costs (including energy use and externalities on a

geographic basis) and should contain a mix of both centralised/decentralised and rainfall

dependent/independent options. Future water planning should take place along with and inthe context of urban design, population growth and the uptake of alternative energy sources.

Most importantly, there should be public discussion about the effective choices that will be

made.



Page 22

Figure 12 Direct costs of water supply/demand options – Sydney, Adelaide, Perth, Newcastle

(Sources: Marsden Jacob Associates 2006; PMSEIC Working Group 2007).

5.2. Demand-oriented options

The next section outlines options for reducing water demand. It is unlikely that one option

only will be sufficient, rather a range of these options should be packaged together.

5.2.1. Cri ter ia for managin g the demand for water

Demand management policy needs to be based on a number of principles, as follows:

Water saving attribute: The policy needs to be an effective means of saving water.

Cost share burden: The burden of a reduced availability of water should be shared

between community sectors: domestic, commercial and landscape in proportion to

their current usage.

Ease of supply of product, roll-out and installation: Policies need to be a mix of short

term immediate responses to longer term approaches. It may be that some policies

can have a sunset clause as other policies unfold over time.

Equity considerations: Equity should be built into all policies to assist those who havethe greatest difficulties paying for water.



Page 23

5.2.2. Reduct ion in rate of pop ulat ion growth

Our scenarios show that for the three levels of per capita demand investigated, including a

return to unrestricted demand, the storages would be under much less threat under the

medium population scenario than under the high population scenario Under the medium

population assumption Melbourne‟s population reaches 5.2 million by 2051 rather than 6.6

million under the high scenario.

Table 4 shows that under the high population scenario, if the medium average inflow

scenario eventuates, the storages would be peak before 2020 if the high per capita water

consumption pattern is maintained. Even under the low per capita consumption assumption,

if the high population scenario comes to pass under the low average inflow outcome, the

storages would be depleted before 2051.

By comparison, under each of the per capita demand assumptions, if accompanied by

medium population growth there is a substantial reduction in the overall consumption of

water and much less pressure on the storages.

One particular scenario is worth highlighting. This is where the medium population outlook iscombined with low per capita water demand. Though as noted below this low demand

scenario will require some sacrifices on the part of Melbourne water consumers, there are

potential reform measures which will ameliorate these sacrifices. Table 4 shows that even

under the low average inflow assumption, should low per capita demand occur along with

medium population growth, the storages would be full by 2025. By contrast, if this low

average inflow occurs, and is accompanied by low per capita consumption but high

population growth, the storages would be depleted by 2051.

The policy changes needed to achieve the medium population outcome are not

unprecedented. A level of net annual migration of 90,000 is not unusual in Australia. Net

overseas migration reached a peak during the 1980s of 157,400 in 1988-89. In the aftermathof the early 1990s recession, the Commonwealth Labor Government cut the migration

program back severely. It was not until the year 1999-2000, when net overseas migration

reached 107,000, that it once again exceeded 100,000. By 2007-08 the ABS estimates that

net overseas migration was 213,700. A cut in the migration program, assuming that it was

reflected in lower settlement levels in Melbourne, would be a relatively costless part of the

solution to the water predicament.

The problem from the Victorian perspective is that successive state governments have

strongly supported increased migration levels set by the Commonwealth Government in

Canberra. At present there is no mechanism whereby the Commonwealth Government can

be made accountable for the downstream costs of providing for the extra population (as with

augmentation of the water supply).

5.2.3. Tightening w ater use restr ict ions

Water restrictions are an effective means of reducing consumption. Water restrictions were

put in place in November 2002 and permanent water saving measures in March 2005. In

April 2007, compulsory Stage 3a water restrictions were instigated and are still current. They

are said to be designed to „save water while minimising the impact on businesses and

community sporting facilities‟ (Victorian Government 2009). The restrictions can be

summarised as follows:

Domestic: No watering of lawns, a two-hour window to water gardens twice a week,

no car washing, restrictions on topping up pools or spas.



Page 24

Landscape: One in four sports grounds can be watered except for exempt playing

surfaces, public gardens can be watered by drippers on a two hour basis two times a

week or in accordance with a WaterPlan.

Commercial: There are no water restrictions where water is used in the production

process. Commercial car washers which use 70 litres or less of water per car are

allowed to operate. Other exceptions (with some conditions) exist for commercialnurseries, poultry sheds, other animal husbandry businesses and construction sites.

The problem with the maintenance of such a restrictive regime is that it would be likely to

lead to a loss of Melbourne‟s landscape. Severe water restrictions, if continued, will put

Melbourne‟s reputation as a liveable, garden city in jeopardy. They will also impact on th e

capacity for home food production and community gardens, two important means of

addressing the rise in food prices associated with climate change itself and mitigation policy

such as a carbon price.

In the case of commercial users, they are progressively required to submit and comply with

water saving plans. Businesses using 10 megalitres of water or more per year must complete

a water management action plan (waterMAP program) (Melbourne Water 2009a). There are1,850 business customers in Victoria that fit into this group. In 2003, a pilot program

“Pathways to Sustainability” involving the highest 200 non-residential water consumers in

Melbourne resulted in 6.2 billion litres of water being saved in Melbourne since 2001,

representing a 13% efficiency gain.

5.2.4. Pri ce inc reases

As noted, the price of water will increase sharply as a result of the costs of recent

augmentation measures. Many studies have documented the fact that water use alters in

response to price (Baumann, Boland & Hanemann, 1997) and that pricing policy is costeffective in reducing water usage (Olmstead & Stavins 2008). Pricing which reflects the

scarcity of water will encourage the utilization of other sources of water, such as recycled

water. Full cost recovery of water was recommended in the recent ADC Infrastructure 21

Summit (Young & Westacott 2008). A rise in the cost would generate a better appreciation of

the value of water. Pricing would reflect the actual cost of water supply as well as a scarcity

factor. This would mean that the cost of externalities such as ecological losses from reduced

stream flow should be factored in the price, as well as downstream externalities in the

sewage charge. An alternative approach would be to price water variably according to

storage levels, the price rising as storage levels dropped (Olmstead & Stavins 2008).

Such a price rise should be for all sectors and all users. However, this policy should includeprovision for hardship factors as water pricing is regressive, with lower income households

being disproportionately disadvantaged. Households with a Health Care Concession Card

should be exempt from price rises or be provided with rebates. Other households with a low

income should be assisted with free provision and installation of water tanks or grey water

systems. Grants could be offered along with interest free loans – repayable from cost

savings due to alternative water sources. The policy could also provide transition planning for

some heavy water using industries, such as coal-fired power stations.

5.2.5. A pp eals for conservation

Target 155 , which began in December 2008, promotes voluntary residential water

conservation to bring water consumption in Melbourne down to 155 litres per person per day,

representing levels of average per capita demand expected under domestic Stage 4



Page 25

restrictions. The target of 155 litres was exceeded for most of the very dry start to 2009. Over

the three months of summer the average use was 177 litres per person per day. However,

low use during winter and spring resulted in the target being met after 50 weeks, with an

average of 152 litres per person per day, compared to 165 L/p/day over the same period one

year earlier. Future conservation campaigns could target even lower residential water use.

There is little doubt that appeals for conservation are likely to be effective when there is a

short term crisis in water supply such as has been experienced in South-East Queensland in

recent years. But the impact may be weakened if extended over decades – as would be

necessary in the case of the period to 2051 examined in this report. This is especially the

case if householders are aware that any savings they make simply accommodate the needs

of additional residents.

A possible solution is to set household targets for water use and give consumers the choice

on how to use water within these targets. Of course, this would be difficult to enforce;

however, so is the voluntary Target 155 program.

5.2.6. En forc ed eff icienc ies

Significant savings can be made through the installation of water efficient appliances, grey

water systems or household tank storages. The use of a dual flush toilet system for domestic

and business use is an example, For a family of four, the installation of a dual flush toilet can

save more than 35,000 litres of water a year (Melbourne Water 2009b). Approximately 20%

of toilets in Melbourne are single flush (caroma dorf 2009). Changing these to dual flush

toilets could save 15.47 GL of water annually. Further water savings of 10% could be

achieved if the toilet suite integrates a hand-washing basin where the water is then used to

flush the toilet.

Various approaches have been shown to reduce water use in urinals. Measures such as new

flush valves and diaphragm replacement lead to a reduction of water use per flush of

between 0.76 litres per flush to 3.9 litres per flush. A US „standard‟ flush is 14.1 litres (Van

Gelder 2008). In the case of washing machines, front-loading machines are usually the most

water efficient, using up to 50% less water than a top-loading machine. Sydney has had a

policy since March 2006 to provide a rebate of $150 for a 4 star or 5a water efficiency rating

(Sydney Water 2007).

In the case of industry price increases, this may not have much impact in reducing water

consumption because some industries have the capacity to pass on costs and higher prices

down the supply chain and to consumers. Thus, it is also important to introduce mandatory

water efficiency standards to industry for water uses associated with production. The four Latrobe Valley electricity generators use approximately 130 GLs per annum of drinkable

water from the Latrobe river system, stored in the Blue Rock dam, not a water supply

presently used for Melbourne. Planning should commence as soon as possible to move

these generators to an alternative water source, such as recycled or desalinated water.

There is a need to fast track the waterMAP program. At present, only 11% of the heaviest

commercial users of water have completed a water management action plan. If the same

saving rate is achieved with the remaining 1,650 large business customers, this should

provide an additional saving of about 6.2 GL per annum. This program should also be

extended to progressively include the group of businesses with the next highest water use.

Penalties can apply to business and other non-residential sites that do not comply with theserequirements in accordance with the set timeframes. As with households, on the grounds of

equity there may need to be a small number of exclusions or concessions to industry.



Page 26

5.2.7. Knowledg e dissem inat ion and socia l market ing

Goodwill around water saving could be further developed in the community and with industry

through the dissemination of information about water scarcity and ways to reduce water

usage. In particular, community consultation on recycling water to potable standard should

be ramped up. A water treatment facility should be constructed at the Eastern Treatment

Plant to supply industry and golf courses, with the ability to be upgraded in order to treatwater to drinking quality. The production of drinking quality water can be demonstrated on a

pilot scale and used to engage with the public about the potential to upgrade the plant for full

indirect potable reuse. Water conservation campaigns need to be maintained and should

highlight the long-term benefits of reducing water demand. Melbourne Water and water

retailers should continue to advertise water saving hints on their websites and water bills.

5.2.8. WaterSmart

The WaterSmart program is based on a model used to assist people with travel. The

TravelSmart program in SA has been shown to produce an 18% reduction in kilometres

travelled by participants, while non-participants increased their kilometres travelled by 6%.

The WaterSmart program involves a random sample of 80,000 households. The program

commenced in June last year and while the evaluation has yet been completed, early

evidence suggests a similar scale of success to the TravelSmart program. The approximate

cost is $100-$170 per participating household. This cost includes using the voluntary

behaviour change approach and:

Selecting the sample of households for intervention and control groups

Phoning/visiting the households and holding a conversation of about 10-15 minutes

(possibly with a survey on the appliances in the household)

Preparing (in collaboration with the client) „tools‟ that would help people make

changes (often in the form of personalised information)

Analysis of meter readings for both intervention and control groups

Follow up calls over 6-9 months to see if people have further questions and need

more assistance.

5.2.9. Smart meterin g

Smart metering systems and control technologies can result in greater water conservation

(Young & Westacott 2008). It provides users with real time information about their water usage. Such a system would provide self-corrective action about specific behaviours which

have heavy water usage. Smart metering could be of benefit in domestic, industrial,

landscape and irrigation sectors. Victoria is already rolling out smart electricity meters, so

there is an opportunity for a concurrent roll-out of water meters or meters which integrate

information on electricity, gas and water usage.

Smart metering for landscape watering also has the potential to monitor specific site

conditions such as plant and soil type, soil moisture and weather conditions and

automatically adjust the water given to each plant (Harrelson 2008). Programs to encourage

the use of this have been undertaken in the US, often accompanied by a significant rebate

for the customers. However, the schemes were found to need better support services, withimproved installation and customer follow-up.



Page 27

5.2.10. Ass istance to low incom e hou sehold s

Sydney Water provides services for the domestic market under the banner of Waterfix. The

program commenced in 2000 and installs three-star rating showerheads, tap flow regulators,

toilet system flush arresters, repair of minor water leaks. The service is offered for $22 with

concession hard holders getting a free service. A similar service is offered to Department of

Housing customers. There is also a „Do it Yourself Water Saving Kit‟ which providesinformation on how the householder can undertake this themselves.

As at 30 June 2007, there were 42,732 homes serviced for the year, resulting in a water

savings of 20,897 litres a year per household. The cost is $94 per household, plus marketing

of $55 per household. The cost effectiveness would depend on the life of products and

repairs undertaken.

Victoria has a similar scheme, the Energy and Water Taskforce, which has undertaken

Energy and Water audits and free retrofits to the value of $300 per household for 5,000 low

income households. The program which works on a social enterprise model with welfare

non-government organizations and incorporates job training for unemployed people, results

in two-thirds of households involved in the program stating that they are now always

conscious of saving water.

6. Conclusions

The purpose of this report has been to draw attention to the water supply challenges

presented by the long drought in Melbourne‟s water catchments. If , as seems possible, the

water flowing into Melbourne‟s dams stabilises at levels well below those assumed in the

past fifty years, then major policy changes affecting both supply and demand for water will benecessary.

The modelled scenarios indicate that Melbourne faces medium term and long term

challenges. For the long term, the current augmentation of the supply via the Sugarloaf

pipeline and the desalination plant is likely to provide some insurance for a decade or so.

However, this will not prevent water restrictions from recurring and should not be considered

to be “drought-proofing” Melbourne. However, given the risk that low average inflows will be

sustained and that population growth will continue to be high, planning for additional supply

should be undertaken.

This report is not intended to provide any definitive answers as to which policy options should

be given priority. Rather our purpose is first to increase awareness of the possibilities of

severe shortages of water, and to provide a basis for public discussion about prospective

options for dealing with the crisis.

It is suggested that this overview be followed by a more detailed analysis of the

cost/effectiveness of the range of demand management options. Such an analysis would

include calculations of water saved, how the options met the outlined principles (Page 22)

and policy implications and the introduction and on-going management barriers and

facilitators. Key points and recommendations from this report are given on pages 2 and 3.



Page 28

7. References

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Baumann, D.D., Boland, J.J and Hanemann, W.M., (1997) Urban Water Demand Management andPlanning, McGraw-Hill, New York.

BOM, (2009a) http://www.bom.gov.au/climate/enso/ Accessed 16 November 2009

BOM, (2009b) http://www.bom.gov.au/climate/IOD/positive/ Accessed 16 November 2009

BOM, (2009c) http://www.bom.gov.au/climate/coupled-model/poama.shtml Accessed 16 November 2009

Cai, W. & Cowan, T. (2008a) Dynamics of late autumn rainfall reduction over south eastern Australia.Geophysical Research Letters, 35, L09708.

Cai, W. & Cowan, T. (2008b) Evidence of impacts from rising temperature on inflows to the Murray-Darling Basin. Geophysical Research Letters, 35, L07701.

Caroma Dorf, (2009) eco logical solutions, Caroma Industries Limited, South Melbourne.

CSIRO, (2005) Melbourne Water Climate Change Study: Implications of Potential Climate Change for Melbourne‟s Water Resources. CSIRO Urban Water and CSIRO Atmospheric Research,Melbourne.CSIRO (2007) Climate change in Australia. Commonwealth Scientific andIndustrial Research Organisation, Australia.

DSE, (2004) Our Water Our Future: Securing Our Water Future Together. Victorian GovernmentWhite Paper.

DSE, (2007a) Our Water Our Future: The Next Stage of the Government's Water Plan. DSE, VictorianGovernment, Melbourne.

DSE, (2007b) Melbourne Augmentation Program. Sugarloaf Interconnector. Victorian GovernmentDepartment of Sustainability and Environment, Capital Projects Division, Melbourne.

DSE, (2008) Augmentation of the Melbourne Water Supply System. Analysis of Potential SystemBehaviour. Melbourne, State of Victoria. Department of Sustainability and Environment.

ENRC, (2009) Inquiry into Melbourne‟s Future Water Supply, Environment and Natural ResourcesCommittee, Victorian Government.

Gauchi, S., (2009) El Nino fear as dams fall to new low, http://www.theage.com.au/national/el-nino-fear-as-dams-fall-to-new-low-20090516-b6t4.html?page=-1 Accessed 1 June 2009.

Harrelson, D., (2008) Creating Demand: Four approaches for promoting „Smart‟ irrigation controllers tohomeowners, WaterSmart Innovations Conference, South Point Hotel and Casino, Las VegasOctober 8 to 10.http://www.awwa.org/files/Resources/Waterwiser/references/PDFs/sustainable2008_mon3-5.pdf

Accessed 3 March 2009.

Ker, P., (2009a) Slowing the flow as poll pledge turns dry, The Age,www.theage.com.au/environment/slowing-the-flow-as-poll-pledge-turns-dry-20090405-9t9x.html

Ker, P., (2009b) Melbournians ignore 155-litre water target, The Age,www.theage.com.au/national/melbournians-ignore-155litre-water-target-20090302-81p3.html

Accessed 2nd March 2009

Marsden Jacob Associates (2006). Securing Australia's Urban Water Supplies: Opportunities and

Impediments, A discussion paper prepared for the Department of the Prime Minister and Cabinet.Melbourne Water (2003) Water Resources and the Environment 2002/03. East Melbourne.

Melbourne Water (2009a) WaterMAP http://ourwater.com.au/saving/industry/watermap

Melbourne Water (2009b) Saving water indoors http://ourwater.com.au/target155/saving-indoors

Olmstead, S.M. and Stavins, R.N., (2008) Comparing Price and Non-price Approaches to Urban Water Conservation; Fondazione Eni Enrico Mattei, Working Paper 2008:66.

PMSEIC Working Group (2007). Water for Our Cities: building resilience in a climate of uncertainty,Prepared by an independent working group of the Prime Minister's Science, Engineering andInnovation Council.

Sinclair Knight Merz, (2005) Determination of the Minimum Environmental Water Requirements for theYarra River , September, 7

Sydney Water, (2007) Water Conservation and Recycling Implementation Report 2006-2007

Van Gelder, R., (2008) High Efficiency field research: Interim Observations, WaterSmart InnovationsConference, South Point Hotel and Casino, Las Vegas October 8 to 10.



http://www.awwa.org/files/Resources/Waterwiser/references/PDFs/sustainable2008_mon3-5.pdf Accessed 3 March 2009.

Victorian Government, (2006a) Central Region Sustainable Water Strategy: Action to 2055.

Victorian Government, (2006b) Water Supply-Demand Strategy for Melbourne 2006-2055.

Victorian Government, (2009) Melbourne Water, Water Restrictions.http://www.melbournewater.com.au/content/water/water_storages/water_storages.asp#2

Accessed 8 March 2009.

Water Resources Strategy Committee, (2002) 21st Century Melbourne: a WaterSmart City: FinalReport.

Young, M. and Westacott, J., (2008) Water, A new paradigm, in Stanley, J. (ed) Proceedings from ADC Infrastructure 21: From Incrementalism to Transformational Change, 6 th and 7th October,Brisbane, Australia.

Appendix A

Domestic water restriction trigger levels for Melbourne Trigger Level (percentage of water in storage )*

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Stage 1 52.2 50.7 47.8 46.3 45.9 44.8 45.9 48.0 50.7 52.2 53.9 53.0

Stage 2 44.6 43.6 41.6 40.6 40.3 39.7 40.3 41.7 43.6 44.6 45.7 45.1

Stage 3a 36.9 36.4 35.5 35.0 34.9 34.5 34.9 35.5 36.4 36.9 37.5 37.2

Stage 4 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3

*Rounded to one decimal point

Source: Melbourne Water, www.melbournewater.com.au accessed 1 June 2009

melbourne's water situation: the opportunity for diverse solutions

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