Outlook, water markets

Seasonal Water Usage Update – February 2018

19 February 2018

This article provides an update on water availability and usage across the southern Murray-Darling Basin at the middle of February2017. The information in this post updates the data presented in our Water Market Outlook October 2017 and December 2017.

After a wet end to 2017, January has swung back to normal conditions across the southern basin during January. The slightly above average rainfall along the southern ranges contributed little to storage inflows. Rainfall has been average in the south however the northern basin has been extremely dry as shown in the map below.

Seasonal determinations in the Murrumbidgee increased by 1% on 15 February but shortfalls to meeting next years high priorities has increased from 220GL to 240GL. All other determinations have remained the same.

The determination update from Victorian authorities confirm the lack of inflows with shortfalls to meeting next seasons reserves increasing by 40GL in the Murray to 420GL and slightly decreasing in Goulburn to 770GL.

The chart below has been updated based on the usage reported by the state authorities. We have subtracted the water use reported by the CEWH but not other environmental water holders.

The “estimated water use” has been taken from our original Water Market Outlook report which we are using as a reference point.

Our original estimates across the southern systems appear to be quite accurate when compare to current recorded usage. Water use in NSW Murray and Goulburn have possibly been under-estimated looking at the water use recorded to-date.

The under-estimated water use in Goulburn was highlighted in our December report and we now estimate about 500GL will be available for carryover with a similar volume in NSW Murray. Carryover in Vic Murray will likely be around 200GL.

The Murrumbidgee remains the system to monitor. Allocation prices increased $10-20/ML in the first half of February due to increased demand from irrigators looking to secure water to finish their summer crops. Unless the Murrumbidgee IVT opens, there is unlikely to be much water available for carryover which could see demand for forwards increase, pushing allocation prices higher again.

We continue to estimate around 1,100GL will remain unused and available for carryover – the same as our December estimate. This is about 4-500GL lower than the volume carried into 2017-18 which is likely to have an impact on allocation prices. Naturally these volumes are estimates and can change depending on in-field rainfall and changes to storage inflows.

Inflows to storages have been dry-average according to the Victorian authorities. All systems reporting significant shortfalls to securing “high priority needs”. Climate models are almost unanimously showing “average” conditions through to the middle of the year. The Victorian authorities also released their initial outlook for 2018-19 determinations which validates such conditions (even though we’ve experienced a mild La Nina).

As shown in the following chart, the volume of water in MDB storages is approximately 10% lower than the same time last year. Burrinjuck and Hume are the only dams to have more water in storage than at the same time last year.

The share of water in storage in the Murray (Hume & Dartmouth) system will be critical heading to the end of the season and something that should be considered when determining whether to carryover.

H2OX will provide a further update on the state of water use and availability as the season progresses.