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New South Wales State of the Environment
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Human Settlement

SoE 2009 > Human Settlement > 3.1 Urban water

Chapter 3: Human Settlement

3.1 Urban water

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Human Settlement

3.1 Urban water

The quality of drinking water in New South Wales is generally good, with the security of supply being managed more efficiently and effectively since 2005–06. Population growth and drought have prompted authorities to seek other sources of water and implement water efficiency programs which have resulted in more sustainable use of urban water.

The state's two major metropolitan water utilities provide high-quality drinking water that consistently meets the Australian Drinking Water Guidelines, while drinking water supplied by rural and local water utilities in NSW meets the guidelines in at least 95% of samples.

Progress on reducing water consumption per person continues, but population growth, the ongoing drought and the need to provide environmental flows to rivers mean that water savings will have to be sustained and supply sources diversified. NSW State Plan 2006 and the 2006 Metropolitan Water Plan aim to secure Sydney's water supply by maximising water recycling, encouraging water savings and developing new water resources.

Increased use of recycled water will reduce the pressure on ecosystems. Substituting recycled water for the potable water currently used in environmental flows will also assist in providing a sufficient and reliable source of urban water.

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NSW indicators

Indicator and status


Information availability

Proportion of metropolitan and regional water supply meeting reliability standards for water quality

No change


Total and per person water consumption for metropolitan and regional centres



Water recycling



Notes: Terms and symbols used above are defined in About SoE 2009 at the front of the report.

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One of the greatest challenges facing NSW is reliable access to water. Ensuring a secure, sustainable and equitable water supply for people, agriculture, industries and the environment is, and should be, a key goal of government. In the context of the ongoing drought and the projected impact of climate change, the importance of securing a sustainable water supply has never been greater. Undoubtedly, water security is essential for all of NSW.

State Plan 2006: A new direction for NSW (NSW Government 2006a) addresses the challenge of water management by describing a delivery framework and targets to guide decision-making in water resource allocation and management. To achieve the goal of a secure and sustainable water supply for all users, the plan's Priority E1 has set targets for metropolitan water use, urban water use in regional areas and rural water use (see Water 6.1). A review of State Plan 2006 commenced in August 2009 and this may adjust some of the plan's priorities and targets.

To achieve these targets, the 2006 Metropolitan Water Plan (NSW Government 2006b) is an adaptive plan that identifies what is required to secure Sydney's water supply until at least 2015. The key components of the plan relate to dams, recycling, desalination and water efficiency. A revised plan, which will take into account the latest information, particularly on climate change, will be released in 2010.

Local water utilities (LWUs) in regional NSW are also implementing best-practice management to ensure that the security and sustainability of water supplies is constantly improving.

The health of urban waterways is affected by diffuse sources of water pollution, such as stormwater runoff, and point sources of pollution, such as discharges from sewage treatment plants. While significant progress has been made in controlling point sources of pollution and some diffuse sources, diffuse source water pollution remains a significant challenge in improving water quality. Diffuse sources tend to be the major contributor of nutrient loads to waterways, especially during large storms.

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Status and trends

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Urban drinking water quality

The NSW Government has endorsed the Australian Drinking Water Quality Guidelines as the benchmark for the provision of water to the people of NSW (NHMRC & NRMMC 2004). These guidelines promote a preventative risk management approach for drinking water quality, from the catchment to the household.

Over the last SoE reporting period, NSW drinking water quality in metropolitan areas has met the standards set by these guidelines. All water supplied by Sydney Water Corporation (SWC) and Hunter Water Corporation (HWC) met microbiological and chemical water quality guideline requirements.

Water supplied to metropolitan areas of NSW complied with the drinking water quality standards set by the National Health and Medical Research Council in the Australian Drinking Water Guidelines (Table 3.1). Drinking water compliance with microbiological indicators has been maintained, and compliance with chemical indicators for LWUs improved over the three years from 2005–06 to 2007–08.

Table 3.1: Drinking water compliance with microbiological and chemical water quality standards


Compliance with health-related criteria: microbiological indicators (% of samples)

Compliance with aesthetic criteria:
chemical indicators* (% of samples)





















Local water utilities







Source: SWC data 2009; HWC data 2009; DWE 2007a; DWE 2008; DWE 2009a

Notes: * The water meets guidelines for aesthetic water quality characteristics, such as dissolved metals, halogens, pH, colour, and turbidity.

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Water supply

Water availability depends on rainfall and temperature and the volume of water held in storages varies with climatic conditions. Climate Change 2.3 discusses observed and predicted changes to rainfall, temperature and evaporation associated with climate change in NSW, including research on the impact of climate change on town water supply systems.

Data on water supply sources for urban use is managed by 106 water utilities and several NSW Government departments. These agencies assess annual performance in managing the sustainable balance between supply and demand. Detailed analysis for Sydney and the Illawarra is included in SWC's Annual Reports and HWC's Annual Reports for the Newcastle and Lower Hunter regions, while LWU reporting is coordinated under a NSW Government water utility performance monitoring program.

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Sources and volume of water drawn

Tracking the volumes of water from a range of sources, such as surface water storages (drinking water supply dams), groundwater aquifers and recycled water schemes, provides the basis for sustainable water management (Table 3.2).

Table 3.2: Total water volumes by source for SWC, HWC and LWUs


Surface water
(gigalitres per year)

(gigalitres per year)

Recycled water
(gigalitres per year)































All other water utilities**







30 ***













Source: SWC data; HWC data; DWE data 2009

Notes: * Trial groundwater extractions amounting to 529 ML by the Sydney Catchment Authority during 2006 and 2007 were fed into streams above the Nepean Dam, and are included in the surface water figures for 2006–07 and 2007–08.
** This excludes the water supply areas for SWC, HWC, Sydney Catchment Authority and Hawkesbury Council.
*** These volumes are from sewage effluent reuse only.

Recycled water

While recycled water contributes a small portion of the total water supply, metropolitan water utilities are increasing their recycling efforts (Table 3.2). Around 4.7% of water came from recycling in 2007–08, up from 2.9% in 2005–06. In 2007–08, recycled water projects in SWC's area of operations saved an estimated 11.480 gigalitres of drinking water. These projects include the largest residential recycled water scheme in Australia at Rouse Hill which supplies around 1.402 GL a year to more than 17,000 homes, and Wollongong's BlueScope Steel project which supplies 6.652 GL per year for industrial use.

In 2007–08, nearly three-quarters of non-metropolitan LWUs recycled effluent (DWE 2009a). The total volume of water recycled was 32 GL, which represented 19% of the total volume of sewage collected. The highest volume recycled by a utility was 4.47 GL at Albury while five other utilities (Orange, Dubbo, Shoalhaven, Tamworth Regional and Wyong) each recycled over 1 GL.

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Climate variability and climate change influence water availability, sources of water and water consumption. In addition, there is constant pressure on water supplies from the demands of a growing population.

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Water demand

Water has not always been used efficiently by all sectors. However, as a result of education campaigns by the NSW Government and water authorities in recent years, along with new water pricing arrangements, community attitudes are changing and water is more likely to be viewed as a valuable resource. For example, the Sydney metropolitan community has responded well to water restrictions and demand management programs and this has contributed significantly to water savings. However, further reductions in water use in all sectors of the community are required to meet future demand in NSW.

Sydney metropolitan area

The total volume of potable water delivered by SWC across its areas of operation (Sydney, the Illawarra, the Blue Mountains and adjacent areas) declined from 526 GL/year in 2004–05 to 482 GL/year in 2007–08. This is primarily due to restrictions and demand management programs, which include water efficiency and leakage reduction programs, and water recycling.

Water consumed as a proportion of the long-term sustainable yield has reduced from 92% in 2005–06 to 85% in 2007–08. This translates to a daily potable water consumption pattern that has been steadily declining, down from 343 litres per person in 2004–05 to 306 L per person in 2007–08. The climate-corrected figure for daily consumption is 308 L per person for 2007–08, and it is estimated that without water restrictions, consumption would have been 378 L per person. SWC's operating licence sets a target of 329 L per person per day by 2010–11.

The trend in per person potable water consumption from 1995–96 to 2008–09 (not corrected for climate) shows the effect of voluntary and mandatory water restrictions and demand management programs during this period. The data demonstrates the success of sustainable water-use programs in preserving water supplies in SWC's areas of operation (Figure 3.1).

Figure 3.1: Demand for potable water, SWC, 1996 to 2009

Figure 3.1

Download Data

Source: SWC data 2009

Notes: Year shown as at 1 January

Residential water use

Since 1991, the average annual volume of residential water supplied to residential users by LWUs has fallen by 48% (from a median of 330 kL in 1991–92 to 173 kL in 2007–08). This is mainly due to the introduction of pay-for-use water pricing and the implementation of water conservation practices, although current water restrictions have also influenced recent results. LWUs in inland regions of NSW supply 50% more water per person than those in coastal regions due to their hotter and drier climate and the greater use of evaporative coolers (DWE 2009a).

The residential sector is the largest water user for most water utilities, accounting for 72% of total water consumed (Figure 3.2).

Figure 3.2: Proportion of water consumed by sector, SWC

Figure 3.2

Download Data

Source: SWC 2008

In regional areas, average annual residential water consumption for each connected property in some of the larger urban water utilities decreased gradually over the period 2004–05 to 2006–07 (Figure 3.3).

Figure 3.3: Average annual residential water consumption by local water utility, 2004–05 to 2006–07

Figure 3.3

Download Data

Source: DWE data 2008

Pressures on water quality in urban rivers and coastal areas

Population growth and increasing urbanisation of catchments affect hydrology. For example, sealed surfaces in urban areas alter the volume and timing of runoff into waterways, and increased pollutant loads from urban runoff and treated effluent discharges have an impact on water quality and aquatic ecosystems. These pressures are being alleviated through investment in capital works for sewerage and stormwater systems, as well as community and industry education campaigns and guidance material.

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The NSW Government is committing significant resources to improving water management with the aim of securing future water needs for urban and regional areas through a range of water supply and efficiency measures.

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State Plan 2006

State Plan 2006: A new direction for NSW (NSW Government 2006a) addresses the challenge of water management by describing a delivery framework and targets to guide decision-making in water resource allocation and management. There are three distinct components to water management in NSW:

  • metropolitan water use (Sydney, the Illawarra, the Blue Mountains and adjacent areas)
  • urban water use in regional areas (Hunter Region, Central Coast and country towns)
  • rural water use (see also Water 6.1).

One of the most significant changes to the management of water in NSW has been the adoption of statewide targets through State Plan 2006. For metropolitan water use this includes the following targets under Priority E1:

  • 'Increase the volume of water recycled from 15 billion litres per year to 70 billion litres of water per year by 2015'
  • 'Save 145 billion litres of water by 2015, representing almost a 25% reduction from Sydney's projected water demand in that year'
  • 'Meet reliability performance standards for water continuity and quality'.

For urban water use in regional areas, this includes the two targets to 'Meet reliability performance standards for water continuity and quality' and 'Improve efficiency and recycling in regional centres' under Priority E1.

A review of State Plan 2006 commenced in August 2009 and this may adjust some of the plan's priorities and targets.

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Water sharing plans

Water sharing plans provide the statutory framework for sharing water between different types of water users (town water supply, industry and irrigation) and the environment. By setting the rules for how water is shared for the next 10 years, these plans provide a decade of security for the environment and water users. Forty-five water sharing plans have already been developed for many areas in NSW, covering both surface and groundwater systems. About 87% of water use in NSW is covered by a water sharing plan.

Metering of water extraction from rivers by large- and medium-scale users with entitlements is currently being implemented with large-scale users now reporting water use every three months and medium-scale users preparing regular estimates of water use.

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Metropolitan water use

Metropolitan water plan

2006 Metropolitan Water Plan (NSW Government 2006b) sets out how the NSW Government will provide a secure supply of water that can meet the needs of Sydney and the Illawarra to 2014–15 and beyond. There are four major parts of this plan to secure Water for Life: dams, recycling, desalination and water efficiency. These measures, together with the plan's adaptive approach, mean that Sydney's water needs are secured for future drought, a changing climate and a growing population.

Metropolitan Water Plan: 2008 Progress Report (NSW Government 2009a) outlines the progress made in implementing the plan. Progress over the past year has enabled the Government to provide more water to protect and restore river systems.

Along with restrictions to keep more water in dams during droughts, work has been undertaken to allow access to deep water in dams and replenish dams with groundwater reserves if needed.

The NSW Government is aiming to provide 12% of Sydney's water needs through recycling by 2014–15. Using recycled water will improve the security and reliability of Sydney's water supplies in the face of future droughts, population growth and the impacts of climate change. Existing or planned large-scale recycling schemes include those at the Rouse Hill, Hoxton Park and Wollongong sewage treatment plants.

From the summer of 2009–10, the desalination plant at Kurnell will be able to deliver 250 megalitres of water per day or up to 15% of Sydney's water needs. To prepare the city for extreme drought conditions, the intake and delivery pipes have been sized so the capacity of the plant can be doubled if necessary.

Water efficiency measures will save 24% of Sydney's water needs by 2014–15. Improvements in water efficiency can be achieved by installing more efficient equipment, educating the community and modifying processes to help use water wisely.

Hunter Water Corporation's H250 Plan (HWC 2008) outlines the long-term drinking water supply strategy for the Lower Hunter region.

Water restrictions and Water Wise Rules

Water restrictions are a temporary response to a short-term water supply–demand imbalance. Due to ongoing drought conditions, residents and businesses in Sydney, the Blue Mountains and the Illawarra have experienced the longest period of water restrictions ever instituted. Level 1 restrictions were introduced on 1 October 2003, level 2 restrictions on 1 June 2004 and level 3 restrictions on 1 June 2005 (see also Figure 3.1). Other parts of NSW have also experienced an extended period of water restrictions.

In June 2009, the NSW Government introduced Water Wise Rules for Sydney, the Blue Mountains and the Illawarra to replace water restrictions. The new rules are simple, commonsense actions designed to ensure that water conservation measures adopted during the current drought continue.

Demand management initiatives

Water pricing for urban customers has undergone significant reform, with a shift in tariffs away from a reliance on fixed annual charges towards revenue generated from usage fees. This pricing reform has contributed to the reduction in water consumption and more accurately reflects the value of water resources and the true costs of supplying water.

Education and training programs target all sectors and regions of the Sydney metropolitan region. The Water for Life education program is an integral component of the Metropolitan Water Plan. The focus of Water for Life is to support and encourage the Sydney community to use water efficiently.

Water Savings Action Plan requirements were established in 2005 under the Energy and Utilities Administration Act 1987. In SWC's area of operations, Water Savings Action Plans are required by all local councils, businesses and government agencies that use more than 50 ML of water per year per site. These plans involve assessing current water use and identifying cost-effective measures to reduce water consumption. A total of 248 action plans (out of more than 320) had been approved by the end of 2008, identifying 2071 cost-effective measures that organisations can implement to save over 7400 ML of water each year.

Since 1999–2000, water efficiency programs and recycling have saved an average of 35.016 GL per year across SWC's areas of operation, with 76.163 GL saved in 2007–08. SWC has implemented residential demand management programs, including WaterFix and Love Your Garden, to assist households conserve water. Both programs involve specialists from SWC visiting residents and assisting them to make changes to their homes and gardens to use water more efficiently.

The Every Drop Counts Business Program has been implemented in 392 businesses across SWC's supply area, resulting in water savings of about 14 ML per year.

Another SWC initiative is a program to actively detect and repair leaks. In 2007–08, leakage was estimated to be 117 ML per day (43 GL per year), about 9% of potable water used. This was a significant reduction on the leaks in 1999–2000 which were over 180 ML per day. SWC aims to reduce water lost by leakage to 105 ML per day by mid-2009 (SWC 2008).

The Replacement Flows Project is Sydney's largest water recycling project. It is a key part of the NSW Government's Metropolitan Water Plan which, consistent with State Plan 2006, includes increasing water recycling in SWC's area of operations to 70 GL per year by 2014–15. The project is designed to save drinking water, reduce nutrient discharges and, together with increased environmental releases from upstream dams, improve river water quality. It will provide up to 18 GL per year of recycled water to the Hawkesbury–Nepean River system, replacing water currently released from Warragamba Dam for environmental flows and domestic and stock use (SWC 2008; NSW Government 2009a).

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Urban water use in regional NSW

Country Towns Water Supply and Sewerage Program

The Country Towns Water Supply and Sewerage Program offers management and technical assistance and financial support for LWUs in the provision of water supply and sewerage services to country towns. Financial support is in the form of grants towards the capital cost of works to address the backlog in water supply and sewerage infrastructure needed to deliver enhanced public health, improved environmental outcomes and security of supply to more than one million people in country towns.

Since its commencement in 1994, the program has spent over $758 million completing more than 360 water supply and sewerage projects with a projected spend exceeding $1.1 billion by its scheduled end in 2016–17.

Other programs

Integrated Water Cycle Management, supported by the Country Towns Water Supply and Sewerage Program, is assisting LWUs plan for sustainable, affordable and cost-effective water supply, sewage and stormwater services over 30 years or longer. Of the 106 LWUs, 85 are developing or intend to develop an integrated water cycle management plan.

The NSW Government promotes continuing performance improvement by LWUs with the aim of improving the quality and efficiency of services to all residents. The water utilities performance monitoring program enables each LWU to benchmark its performance against that of similar water utilities.

Local water utilities inquiry

In September 2007, the NSW Government commenced an independent inquiry into secure and sustainable urban water supply and sewerage services for non-metropolitan NSW. The inquiry is part of an evolving process of reform for the provision of water supply and sewerage services to non-metropolitan NSW. It builds on the reform agenda of the National Water Initiative that is currently being implemented through the Best Practice Management of Water Supply and Sewerage Guidelines (DWE 2007b) and the Country Towns Water Supply and Sewerage Program.

The report from the inquiry (DWE 2009b) recommends the consolidation of water supply and sewerage providers and the adoption of new organisational structures. The report also recommends strengthening the regulation of water supply and sewerage providers, streamlining regulatory reporting and procedures, and appointment of an ombudsman to enhance consumer protection if it can be demonstrated that there are net benefits in doing so. The Government's response to the recommendations of the inquiry is expected in the second half of 2009.

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Other Government responses

Building Sustainability Index

The Building Sustainability Index (BASIX) for new homes was introduced in 2004 to ensure homes are designed to use up to 40% less urban water than the average dwelling built before its introduction. Based on commitments being reported through BASIX, the average potable water use in a compliant NSW home is approximately 135 L per person per day (DoP 2008a).

For commitments made on BASIX certificates issued in the 2005–08 reporting period, new BASIX-compliant single dwelling homes are saving NSW an additional 5 GL per year with cumulative water savings across the state forecast to reach 28 GL in 2010. These figures do not include water efficiencies from BASIX-compliant alterations and additions, which will add further savings.

Funding programs

Established in July 2007, the NSW Climate Change Fund provides rebates for washing machines and rainwater tanks, and funding for water recycling and stormwater harvesting schemes and water saving projects through the Green Business and Public Facilities programs. To 30 June 2008, the Climate Change Fund had supported projects that will save more than 16 GL of water per year (DECC 2008a) (see Climate Change 2.2).

The Urban Sustainability Program aims to facilitate projects of significant environmental benefit that are delivered by local councils in partnership with other government agencies, local businesses, community organisations and householders. It provides funding for urban water management projects that have a particular focus on stormwater and urban runoff to achieve sustainable water quality and conservation outcomes.

NSW Government Sustainability Policy

Water efficiency in NSW Government operations is being targeted through the NSW Government Sustainability Policy (DECC 2008b) (see People and the Environment 1.3). The policy outlines how the Government will encourage sustainable water and energy use, reduction of greenhouse gas emissions, efficient waste and fleet management and sustainable purchasing. The policy applies to NSW Government agencies and sets a statewide target to reduce total potable water consumption by 15% of 2005–06 levels by 2010–11.

Water Efficiency Labelling and Standards Scheme

Under the national Water Efficiency Labelling and Standards (WELS) Scheme, registration and water efficiency labelling of washing machines, dishwashers, toilets, urinals, taps and showers is mandatory, and the introduction of water efficiency labelling of combined clothes washer–dryers is currently being considered (DEWHA 2008a). At present only toilets are subject to minimum water efficiency standards. Through its participation in the WELS Scheme, the NSW Government proposes introducing minimum standards for washing machines and dishwashers.

National Water Initiative

The National Water Initiative (NWI) is a shared commitment made by governments across Australia to increase the country's water use efficiency and provide greater certainty for investment and productivity for communities and the environment. The urban water component of the NWI focuses on the need to secure urban water resources by improving the reliability of supply, water efficiency and integrated water planning (NWC 2008). In August 2006, the National Water Commission accredited the NSW Implementation Plan for the National Water Initiative (NSW Government 2006c), which contains specific actions for implementing the NWI's eight key elements.

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Urban water quality and river health

Metropolitan Water Plan: This plan includes actions that will help restore and protect Sydney's rivers and aquifers and their catchments. Water for the environment is protected through water sharing plans and environmental flow releases from dams (Water 6.1). Further, by diversifying water sources and recycling water, there is less pressure on rivers and dams. The Government has agreed to environmental flows for the upper Nepean dams and these will be in place by 2010 following modification to some dams. Environmental flows from Warragamba Dam will be determined by 2014–15.

Diffuse source water pollution management: The NSW Diffuse Source Water Pollution Strategy (DECC 2009a) provides a coordinated approach for determining statewide priority problem areas for managing diffuse source water pollution and a set of management actions to focus effort and investment across government, agencies, councils and catchment management authorities (CMAs).

Stormwater guidance: The NSW Government provides guidance and advice to councils, communities and CMAs through its program to manage urban stormwater, including management of activities that may contribute to the pollution of stormwater. This includes guidance on harvesting and reuse, and soils and construction impacts.

Water Quality Objectives: These are the agreed environmental values for NSW rivers, creeks, estuaries, lakes and marine waters. They set out the community's values and uses (healthy aquatic life, water suitable for recreational activities such as swimming and boating, and drinking water) and a range of water quality indicators to help assess whether the current condition of our waterways supports those values and uses.

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Future directions

By the late 2020s, Sydney's population is expected to grow by up to one million people, with other parts of NSW anticipated to grow by a further one million people (ABS 2009a). It is predicted that water consumption will increase by 73 ML per day (27 GL per year) over this time. The future for NSW's urban water use will include the continued development of the 2006 Metropolitan Water Plan (NSW Government 2006b) to secure water for Sydney.

Additionally, the Government will continue to drought-proof regional towns and look into ways of providing water to the environment via the development of water sharing plans to identify significant environmental flows. Water pricing, including pricing of recycled water and stormwater, is a key driver in encouraging the use of water from potable sources. Plans for increasing Sydney's water supply will need to consider equity issues and environmental impacts that may be shifted within the Hawkesbury–Nepean catchment or between catchments.

Overall, the Metropolitan Water Plan and Integrated Water Cycle Management arrangements in NSW aim to balance water supply and demand and ensure a secure and sustainable supply for all residents.

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