SoE 2009 > Water > 6.1 Water resources

6.1 Water resources

Prolonged drought has had a heavy impact on all New South Wales water users as well as the environment.

Due to protracted drought conditions, most inland rivers have had limited flows and the levels in many water storages have reached historic lows. Some coastal systems have also suffered from reduced rainfall and low flows.

Water sharing plans have now been implemented for around 87% of water extraction in NSW. These plans balance the needs of water users and the environment and enable an equitable distribution of water to different users. Environmental flow rules under the plans commit a portion of the water available to the environment. Plans covering the remaining water resources are being introduced progressively and will be completed for the Murray–Darling Basin by 2011 and the rest of NSW by 2012.

Water sharing plans for some rivers have had to be suspended, however, because of critically low flows. Contingency plans are in place to conserve water resources for priority uses such as town supplies and domestic and stock water, with allocations for high security users restricted and very limited or no allocations for general security users.

Because of the limited water available, environmental releases from water storages have been minimal and low river flows have placed aquatic ecosystems under severe stress. However limits on extractions have kept total extractions to 50% or less of the available water in all major regulated river systems.

To add to the water set aside for the environment through the water sharing plan rules, water licences have been purchased for environmental purposes or created from savings achieved by improving water infrastructure.

The volumes of water committed to environmental purposes are now greater than ever before and are better targeted to benefit high value ecosystems and improve river health.

NSW indicators

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

Introduction

Water resources are critical for human needs such as town water supply, stock and domestic water, irrigation of crops, mining and industry. Most of these needs are satisfied by extracting water from rivers and groundwater. Rainfall is also collected in farm dams and floodwater harvested from river floodplains.

Maintenance of a healthy environment also depends on an adequate supply of water. Water resources are needed to preserve the health of riverine, estuarine and wetland ecosystems and maintain the food chains that support fish and other aquatic species. They enrich floodplain soils and provide connectivity between different aquatic ecosystems. The health of riverine ecosystems is discussed in Water 6.2, wetlands in Water 6.3 and estuaries and coastal lakes in Water 6.6.

Planning for water use to meet socioeconomic demands and environmental needs must be balanced and take into account the long-term variability in supply and the extremes of climate, such as drought and flood. NSW has approached this task through the development of statutory water sharing plans under the state's Water Management Act 2000. These plans, which are discussed extensively later in this section, aim to protect water for the environment and provide better security of entitlement for all water users.

Status and trends

Water use and sources of water in NSW

On average, water use in NSW is about 7000 gigalitres per year, where 1 GL equals 1 billion litres. Around 80% of this water is extracted from regulated rivers, those where flows are controlled by large rural water storages operated by the State Water Corporation. The remainder comes mainly from groundwater in the major inland alluvial systems (see Water 6.4), with the balance from unregulated rivers.

Figure 6.1 shows how this water is used. Agriculture is the largest user of bulk water in NSW (70%), followed by water supply (11%) and household uses (10%). Water supply includes water for sewerage and drainage services, but mainly describes water that is lost through evaporation and infrastructure leaks during the delivery of services to both agriculture and households (ABS 2006).

Figure 6.1: Water consumption in NSW, 2004–05

Source: ABS 2006

Water availability

The factors that most significantly influence water availability are climate (rainfall and temperature) and storage capacity. Human uses of water largely depend on the regulation and storage of runoff from rainfall in large dams. These are constructed to secure water supplies and have the effect of smoothing out the natural variability in the availability of water, by storing it during periods of high river flows for use during periods of low rainfall. By contrast, aquatic ecosystems require variability in river flows and are adapted to boom and bust cycles and seasonal fluctuations in flow.

NSW has 19 major dams and storages. The largest dams are the Hume, Burrendong, Burrinjuck, Blowering and Copeton, while Menindee Lakes also operates as a major storage. Much of the public storage capacity was built between the mid-1950s and 1990. The combined capacity of these storages is over 18 million megalitres of water.

Table 6.1 summarises water levels in major NSW water storages between 2006 and 2008. Water availability in Murray–Darling Basin storages was well below the long-term average during this period. This is largely due to inflows to the southern basin being significantly lower than the long-term average. The resultant levels of runoff are among the lowest on the historical record (CSIRO 2008a). In 2006, inflows to storages in the Murray Valley were the lowest ever recorded.

Table 6.1: Storage levels at major public water storages in NSW, 2006–09

Source: State Water Corporation data 2008

Notes: The total volume of water storage for NSW includes some storages not included in the table.
Storage volumes are as recorded at 1 July each year.

Water extraction

The major regulated river valleys in NSW are the Murray, Murrumbidgee, Lachlan, Macquarie, Border, Gwydir, Namoi and Hunter. Extraction from the unregulated Darling River is also significant. The relative amount of water diverted by users from regulated rivers and the water available to the environment varies from year to year, depending on the prevailing weather conditions, water availability, and the flow rules in water sharing plans (see Responses below).

Each year water is allocated for consumption in the regulated river valleys according to the security of entitlement. Town water supply, water for major utilities, and domestic and stock water have the highest level of security over all other licences. Other high security licences receive allocations in all but the driest years and are typically used for irrigation of permanent plantings, such as horticulture and vines, as well as industries that require an assured supply of water.

The supply to general security licences mostly used for irrigating annual crops, such as cereals, rice, cotton and pastures, is more variable from year to year. Depending on water sharing plan rules, general security water can be carried over from year to year, if annual allocations are not fully used. Water that is not allocated for extraction each year is considered part of environmental water allocations, along with that allocated specifically to the environment through the environmental flow rules of water sharing plans and environmental water licences.

Long-term modelling of river flows and extractions

Long-term modelling of river flows is used to predict flow behaviour in regulated rivers and the impact of water resource development on the natural flows of rivers. This modelling underpins water sharing plans and licensing and is also used to determine water allocations on an ongoing basis.

The models are based on flow data for the last 110 years and describe the variation that can be expected in river flows and water extractions over the long term. As a general rule, the models show that the proportion of water remaining for the environment is higher during typical wet flows, than dry ones. By contrast, when flows are low there is less water available in total and a greater proportion of it is used for consumption.

Current river flows and extractions

The hydrological modelling described above represents averaged flow patterns and extractions over the 110 years that records have been kept. While it provides a contextual framework against which actual flows can be described or interpreted, it does not reflect current conditions very well. Figure 6.2 and Figure 6.3 reflect current conditions and show water extractions and availability for some of the main regulated rivers in NSW over the past nine years.

Water extractions in recent years have been substantially lower than average. Figure 6.2 shows that the overall quantity of water extracted from regulated rivers has declined over the nine-year period and fallen markedly in the past two years, reflecting the severity of drought conditions.

Figure 6.2: Water diverted by licensed users in the major NSW regulated valleys, 1999–00 to 2007–08

Source: DECCW data 2009

Notes: Observed diversions are metered general security, high security and supplementary diversions.

Apart from a relatively wet year in the Namoi Valley during 2005–06, conditions have been dry for the past five to six years in all of the major inland river valleys in NSW, with dry conditions intensifying during the last two years. Overall, the southern inland river valleys have experienced lower flows than the northern valleys. Figure 6.3 shows that flow volumes lower than expected in a typical dry year have been experienced in the Macquarie and Lachlan since 2002–03, the Gwydir since 2005–06, and the Namoi and Murrumbidgee since 2006–07.

Figure 6.3: Licensed diversions and water remaining for the environment in the major NSW regulated valleys, 1999–00 to 2007–08

Source: DECCW data 2009

Notes: 'Water remaining' is that left for the environment after extractions. It is assumed that all water not diverted by metered users is available for the environment.
Observed diversions are metered general security, high security and supplementary diversions. Floodplain harvesting is not included as it is not yet licensed.
The data for each valley represents total water available and is taken from a representative gauging station downstream of all major tributary inflows and upstream of all major extractions.
Total flow and observed diversions in the Murrumbidgee Valley are influenced by water released from the Snowy Mountains Scheme. In percentage terms the influence is greatest in dry years. Development in the valley reflects this inter-valley transfer.
Wet, median and dry flow levels are sourced from long-term (110-year) hydrological modelling of conditions for water sharing plans.
The typical dry year is the 80th percentile of total water available, the typical median year the 50th percentile and the typical wet year the 20th percentile. Percentile is the proportion of time the value is equalled or exceeded.

Despite the general low levels of water availability, in over a half of the last nine years in all river valleys the environment has received at least 50% of available flows, except the Murrumbidgee which receives additional water for consumption from the Snowy Mountains Scheme. This highlights the increasing focus on ensuring that water is protected for the environment since the commencement of the Water Management Act 2000 and the water sharing plans.

Floodplain harvesting, which is not included in Figure 6.3 as it is not yet licensed, is considered to be most significant in the valleys of the northern Murray–Darling Basin, including the Macquarie and Gwydir rivers.

Environmental water

Two types of environmental water are recognised under the Water Management Act 2000 and provided for in water sharing plans for regulated rivers in NSW: planned and adaptive environmental water.

Water that is committed to the environment by environmental water rules in water sharing plans is known as 'planned environmental water'. This generally takes two forms: firstly, the limits that are placed on water extractions to ensure that water remains in the river as shown in Table 6.2 and, secondly, specific environmental flow allocations or rules.

Water that is committed to the environment through water access licences is known as 'adaptive environmental water'. This is equivalent to 'held' environmental water under the Commonwealth legislation and is in addition to the planned environmental water.

Environmental water rules

Environmental water rules are based on 12 broad river flow objectives, which are critical for maintaining river health. These are implemented through water sharing plans that are being developed progressively for all water sources in NSW.

Environmental water rules for the major regulated rivers are designed to:

• limit extractions so that the major share of water is protected – around 50% of the average annual water in the regulated river systems is currently retained in the river
• replicate natural flow patterns or events so water is available when and where it will best support ecological processes or meet environmental needs.

Table 6.2 provides examples of some environmental water rules currently in use in the regulated river system.

Table 6.2: Examples of environmental flow rules under water sharing plans

Source: DECCW data 2009

The rules in regulated river systems are more complex because of the ability of the major storages to provide for environmental flow management. By contrast, flows in unregulated rivers can only be protected through controls on the volume or timing of extractions. In most of these streams, concern for river health is greatest during dry periods when flows are naturally low. Water sharing plans for unregulated rivers therefore require licence holders to stop pumping when river flows fall below a certain level. Many of the plans also provide for limits on how much water can be taken during higher flow levels.

Environmental water releases

Table 6.3 presents the volumes of water that were released from storage through specific environmental allowances or as a result of adaptive environmental licences by river valley from 2005–06 to 2008–09. There are other rules that also result in delivery of water to the environment such as prescribed end-of-system flows and sharing of supplementary flows which are not included in this table.

Table 6.3: Environmental water releases, 2005–06 to 2008–09

Source: DECCW data 2009

Notes: All figures are in megalitres.
'Environmental water allowance' refers to water held in storage for release to assist in environmental watering
'Adaptive environmental water' refers to water allocated to the environment under the conditions of water access licences.
Figures for the Murray come from MWWG 2008 and are reported on a different time frame. They have been redistributed to allow comparison with the other water sources.

The first licences obtained for use as adaptive environmental water were created in the Murray Valley in 2004. Since then licences to be used as adaptive environmental water have also been purchased in the Gwydir, Lachlan, Macquarie and Murrumbidgee.

Some examples of environmental water releases during 2008–09 include:

• delivery of 90 ML of water to the isolated wetland remnant Whittakers Lagoon on the Mehi Floodplain in the Gwydir Valley which, along with subsequent rainfall, resulted in the site attracting a number of waterbirds, including grebes, cormorants, darters, ducks and waders
• delivery of 27,500 ML of environmental water allowance and 812 ML of adaptive environmental water to Lowbidgee wetlands on private property near Maude and Balranald and on Yanga National Park to support breeding of the southern bell frog.

Pressures

Water extraction

Too much extraction over an extended period places stress on river health. There is clear evidence that the total volume of water extracted from rivers in NSW is affecting the health of aquatic ecosystems. For example, the Draft Macquarie Marshes Adaptive Environmental Management Plan (DECC 2009a) shows the decline and/or loss of wetland communities that has resulted from water extraction combined with the effects of river regulation and drought. This finding has necessitated a formal notification by the Australian Government to the Ramsar Convention of a likely change to the ecological character of a Ramsar-listed wetland caused by human disturbance.

The Sustainable Yields Assessment Project for the Murray–Darling Basin (CSIRO 2008a) has modelled rainfall runoff and inflows to river systems for a range of scenarios and levels of water resource development. These analyses found that water resource development has caused major changes in the flooding regimes that support important floodplain wetlands in the basin and that climate change could have additional effects on the seasonal patterns and overall availability of flows.

River regulation

Water storages and regulating structures have been built to provide greater security of supply, moderating the effects of variability in stream flows and enabling storage of water for release during dry periods. As a consequence, river regulation has caused modification to natural flow regimes, reducing flow variability and altering river morphology.

Aquatic ecosystems, particularly inland rivers, are adapted to highly variable flow levels. To a significant extent, aquatic ecosystems are dependent on this variability to maintain or complete their life cycles. Modification of natural flow patterns is therefore a contributing factor to the loss of biodiversity and declining health in aquatic ecosystems over the longer term.

The Sustainable Yields Assessment Project assessed the degree of regulation of river flows due to water resource development in each valley of the Murray–Darling Basin, and the ratio of water releases to total water availability (CSIRO 2008a). The Murray, Murrumbidgee and Macquarie were found to be highly regulated, the Lachlan, Gwydir and Namoi moderately regulated and the Border Rivers were subject to low levels of regulation. The Paroo is the only unregulated river system in the Murray–Darling Basin. These results show a strong pattern of conformity with the overall river ecosystem health outcomes described in Table 6.6 and Map 6.1.

Extreme drought

Droughts occur naturally in Australia and aquatic ecosystems are adapted to periods of dryness. However, severe and prolonged drought can have major repercussions for all water users and the environment. During the current drought – among the worst on record in some river valleys – the cumulative stress of reduced water availability over preceding years has led to severe water shortages. In five river systems, water sharing plans have been suspended and contingency plans implemented to meet high priority uses of water.

Water shortages have resulted in a deterioration in the condition of many aquatic ecosystems, including river red gums and native fish populations, and provided fewer breeding opportunities for colonial waterbirds and frogs. An unexpected consequence has been the exposure of sulfidic sediments that are usually permanently inundated, leading to acid contamination (see Land 5.1 and Water 6.3), as has occurred at Bottle Bend Lagoon on the NSW side of the Murray River (Hall et al. 2006).

Climate change

The impacts of climate change are uncertain but evaporation is expected to increase and alterations to rainfall patterns and levels of runoff in NSW are likely, leading to changes in the flow regimes of rivers and affecting aquatic ecosystem health (see Water 6.2). Climate change is expected to bring lower winter rainfall to south-western NSW, reducing river flows, storage volumes and water availability (DWE 2008). These expected impacts represent a severe threat to both irrigated agriculture and aquatic ecosystems over the longer term.

Under the median climate change scenario and current water sharing arrangements, by 2030 a decline in water availability in the Murray–Darling Basin would reduce the use of surface water by 4% (CSIRO 2008a). In volumetric terms, this fall in supply would be borne primarily by the environment and general security users rather than critical human needs, such as town water supplies, with the greatest impacts felt in dry years (CSIRO 2008a).

Water pollution

The quality of water affects its suitability for human use as well as potentially affecting the health of aquatic ecosystems. To a significant extent, water quality reflects the state of vegetation cover and land management practices in river catchments. Water 6.2 discusses the condition of riverine water quality and describes catchment disturbance and diffuse runoff as significant pressures.

Responses

State Plan 2006

State Plan 2006: A new direction for NSW (NSW Government 2006) has the following target for rural water use under Priority E1: 'Across NSW meet the commitments under the National Water Initiative to restore water extraction from rivers to sustainable levels'. This target is being addressed through the NSW water reforms described below.

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

National Water Initiative

The National Water Initiative commits NSW to achieving sustainability in the use of its water resources. The agreement also facilitates the expansion of trade in water resources to promote the highest value uses of water and more cost-effective and flexible mechanisms of water recovery to achieve environmental outcomes.

Water reforms

There has been significant progress in water reform in NSW over the last 10 years. This includes the introduction of the Water Management Act 2000, which is based on the concept of ecologically sustainable development and recognises the importance of transparent and controlled allocation of water to the environment and extractive uses.

In NSW, reforms have been achieved through three stages:

• firstly, through a cap on water extractions in the Murray–Darling Basin
• then via environmental and water sharing rules in water sharing plans and the establishment of tradeable water property rights
• most recently through acquisition of additional water for the environment through water savings and buyback of water licences to address historical over-extraction.

Murray–Darling Basin cap

An audit of water use in the Murray–Darling Basin in 1995 concluded that the high level of use there was a major factor in the decline of river health. As a result, a cap on surface water extractions in the basin was introduced to prevent further growth in extractions and the extractions monitored to ensure that the amount of water taken by licence holders conformed with the cap (Table 6.4).

Table 6.4: Progress in achieving Murray–Darling Basin cap targets

Source: DECC data 2008

Notes: All figures are in gigalitres.

Table 6.4 shows that while diversions exceeded the cap targets for 2007–08 in the Barwon–Darling and Gwydir valleys, overall extractions were maintained below the total cap for the NSW portion of the Murray–Darling Basin by 726 GL.

Water sharing plans

Water sharing plans are a significant development in improving the management of water resources in NSW. They can apply to rivers, groundwater (see Water 6.4) or a combination of water sources. These statutory plans provide a legislative basis for the sharing of water between the environment and extractive users. They bring certainty for both the environment and water users over their 10-year duration and a basis for the trading of water licences and water allocations.

Water sharing plans aim to:

• protect the fundamental health of the water source
• ensure that the water source is sustainable in the longer term
• provide water users with transparency about water allocations.

Environmental flow rules, implemented through the water sharing plans for each river valley, enable the equitable sharing of available water between users, while also providing water for environmental needs.

Since 2004, a total of 45 water sharing plans have been gazetted across NSW, covering about 87% of the water used. Plans for the remaining water sources are being developed progressively with the plans for the Murray–Darling Basin to be completed by the end of 2011 and the rest of the state by 2012. Over the long term, the plans for regulated rivers will return on average an additional 220,000 megalitres of water per year to the environment, over and above the requirement under the Murray–Darling Basin cap.

Although environmental flow rules have been introduced, it may take some time before aquatic ecosystems receiving environmental water show signs of recovery. The severity of drought conditions in some regions of NSW has meant that insufficient water has been available for some water sharing plans to operate effectively.

Water sharing plans have been suspended in the Lachlan since the plan commenced in 2004, the Murray and Murrumbidgee since September 2006, the Macquarie–Cudgegong since July 2007 and the Hunter Regulated Water Source since 2006. During 2009 conditions have eased in some river valleys and the Hunter plan has now been reactivated. While the remaining plans are suspended, contingency arrangements have been in place with available water being prioritised for critical human uses, such as domestic requirements and high priority industry needs.

Water recovery

The NSW Government is recovering water for the environment through a number of programs including NSW RiverBank, the NSW Environmental Trust and the Rivers Environmental Restoration Program, The Living Murray program (see Water 6.2), the NSW Wetland Recovery Program (see Water 6.3) and the Water for Rivers Project (Snowy). Under these programs NSW has purchased about 90,000 unit shares of water for the environment in the Gwydir, Lachlan, Macquarie and Murrumbidgee rivers. Table 6.5 summarises the amount of licensed water purchased collectively by NSW from these programs by river valley. However, it does not include water purchases by the Australian Government.

Table 6.5: Adaptive environmental water entitlements purchased per valley, 2006–08

Source: DECCW data 2009

Notes: The 'general security' and 'supplementary access' water purchased under NSW RiverBank, the Rivers Environmental Restoration Program and the NSW Wetland Recovery Program are shown as megalitres of entitlement.
Units of measure for entitlement purchased under The Living Murray Initiative are expressed as long-term cap equivalent megalitres, as per the The Living Murray Business Plan (MDBMC 2007) and include all security entitlements. They are not directly comparable with the water purchased in the other streams.

Adaptive environmental licences are also being created through water savings from infrastructure efficiency projects. This includes over 93,000 ML of entitlement through Water for Rivers projects in NSW as well as 63,000 ML from The Living Murray Initiative in the state. For example, about 47,000 ML per year of water will be saved and committed as an adaptive environmental licence through the initiative's Darling Anabranch Pipeline project.

Climate change

The NSW Government has undertaken a study into the likely impacts of climate change on rainfall and runoff in NSW (DWE 2008). The results of this and similar studies will be taken into account as future water sharing plans are developed and existing plans revised.

Future directions

The Natural Resources Commission will assess implementation of the NSW water sharing plans in year 9 of their 10-year time span, starting in 2013.

The 2008 Intergovernmental Agreement on Murray–Darling Basin Reform will provide for a greater level of coordination and a whole-of-basin focus in the management of water resources in the basin. The Basin Plan, to be developed by 2011, will establish a new sustainable diversion limit or cap on water extractions for each valley and any new water sharing plans developed after this will need to be consistent with it.

With the recent referral of powers relating to water management in the Murray–Darling Basin, the Commonwealth will play an increasingly important role in determining total water extraction, coordinating environmental water management, providing leadership and direction in shaping water policy, and developing future initiatives to improve the management of water resources and river health.

The NSW Sustaining the Basin Program will improve water supply infrastructure and the metering of regulated and unregulated rivers and groundwater, and will also license floodplain harvesting as part of the water sharing framework.

The purchase of further water licences by the Australian and NSW Governments will increase the volume (and proportion) of water available for the environment and more savings will be achieved through upgrades to water management and irrigation infrastructure.

The Productivity Commission is investigating the best means of attaining water for the environment while balancing environmental needs with social and economic outcomes.

Refinement of knowledge and monitoring of responses to environmental flows will allow for adaptive management and should enhance the ability to better target high value areas, optimising the environmental benefits of flows.

Better information on the relationship between surface water and groundwater is desirable to facilitate more integrated management of all water resources.

Further research and monitoring of the impacts of climate change, particularly reduced water availability, is needed so that flow rules and water sharing plans can be adjusted accordingly, when the effects of climate change are detected or if pronounced dry conditions are no longer regarded as an exceptional phenomenon.

A better understanding of how models of flow variability and water resource management behave in extreme conditions at the limits of their predicted variability, such as extended periods of drought, is desirable.