Outlook, Water, water markets

Determination outlooks 2019/2020

15 May 2019

All states updated their outlooks for the 2019/2020 seasonal determinations today. We have provided a summary of the announcements from each state along with some commentary. Subscribe to our weekly newsletter to read a more in-depth analysis to be released shortly.

Announcements

South Australia

The Department for Environment and Water announced the opening seasonal determination on 1 July 2019 for SA Murray High Security will be 22%. This is an 8% improvement from their initial announcement on 15 April.

There is a “…90 percent probability that allocations will increase to at least 82 percent during 2019-20 and just over a 70 percent likelihood that allocations will increase to 100 percent…” by the end of the season which includes 50GL offset by the new desalination plant.

Because forecast opening determinations were less than 50% when announced in April, SA entitlement owners can carryover unused allocation up to 20% of their entitlement volume.

SA DEW outlooks issued 15 May 2019

New South Wales

In the NSW Murray (and Lower Darling) there haven’t been any changes to forecast seasonal determinations. there has been a 40GL improvement in resources and “…as
a result, it is likely that high priority commitments, including general security carryover, can
be met in 2019-20.” A further 165GL of inflows are required to cover conveyance entitlements.

Under extreme and very dry scenarios 0% is forecast. The determination outlooks for November 2019 under dry and mean inflow scenarios have actually improved by 2% and 7% respectively to be 6% and 30% against General Security entitlements.

NSW DOI outlooks for NSW Murray issued 15 May 2019

The Murrumbidgee has seen some modest inflows and is about 100GL short of filling its conveyance requirements and this will be borne by Coleambally Irrigation & Murrumbidgee Irrigation until improvements are seen.

The have been improvements to the determination outlooks under the dry and average inflow scenarios but the other scenarios are showing 0% through until November.

NSW DOI outlooks for Murrumbidgee issued 15 May 2019

Victoria

The updated seasonal determination outlooks from the Northern Victorian Resource Manager show a lower opening determination under all inflow scenarios, but the August and later determinations are slightly higher than forecast back on 1 April.

NVRM Outlooks issued 15 May 2019

Commentary

Some of the announcements above may have come as a surprise to the market given recent rainfall events. While the rainfall has been welcomed, the benefit has been felt “in the paddock” rather than in the catchments. Regular rainfall events in the catchments will be needed to generate “average” inflows to storages.

It must also be remembered that the traditional inflow period in the southern MDB is from July through to September and this may explain the slight improvements to August outlooks in Victoria – the catchment is wetting up and further rainfall should see increasing yields.

H2OX will publish a more in-depth analysis of the above announcements and what it means for water availability in the coming weeks. To keep informed about factors influencing the water market across the southern MDB subscribe to our weekly newsletter.