Water managment, water markets

End of season Goulburn IVT transfers

13 June 2019

In recent years there have been large transfers through the Goulburn IVT at the end of the season. This has often shut the IVT and pushed the trade opportunity well into the negative restricting trade out of the Goulburn at the beginning of the following season.

The reason for these transfers has been uncovered in recent conversations with the Goulburn-Murray Water (GMW). Its not that the transfers have been hidden, they just haven’t been explained by the various authorities. Given the significant changes in the water market in recent years, this information is critical when working out a water strategy.

In short;

  • There have been 38,156ML of entitlement recovered in the Goulburn for the Snowy Environmental Reserve
  • The allocations from this entitlement, as at 31 January each season, are transferred into the Murray at the close of each season
  • The transfer occurs regardless of the capacity available in the Goulburn IVT
  • In addition, allocations against a further 99,649ML of Goulburn entitlement historically traded out as an exchange-rate trade are also added to from the Goulburn IVT as seasonl determinations are made. This can also add to the Goulburn IVT account balance at the start of the new season.

Background

The Snowy River Water Recovery project ran through the mid 2000’s. It was a series of water recovery projects undertaken across the southern Basin to reduce the reliance on the Snowy River to supply water into the Murray. In Victoria, water was recovered through various projects in both the Murray and Goulburn systems. The recovered water was converted into a Bulk Entitlement and the delivery obligations are in the Murray.

Determinations made against the Murray bulk entitlement are added to the available water resource and distributed through seasonal determinations in the following season. Allocations against the Goulburn bulk entitlement are transferred through the IVT at the end of each season and added to available water resource in the Murray system. The volume of allocation transferred is determined by the Goulburn seasonal determination at 31 January. The volume transferred through the Goulburn IVT is done irrespective of the available balance.

The Snowy entitlement totals 38,573ML is held by the Victorian Environmental Water Holder (VEWH) and is comprised of;

  • Goulburn System – Snowy Environmental Reserve comprising
    • 3,600ML HRWS from pipelining of Normanville Water Works
    • 10,912ML HRWS from Improved Measurement of Small Volumes Supplies to Irrigation Districts Program
    • 2,000ML HRWS from Goulburn Strategic Measurement Project
    • 13,440ML HRWS from Central Goulburn 1234 irrigation modernisation (plus 8,159ML LRWS)
  • and a further 8,321ML HRWS held by the VEWH for the Snowy as water shares

2019/2020 Season

So what does this mean for the end of the current season leading into 2019/2020?

At the time of writing, the Goulburn IVT has a capacity of 87,000ML which can be transferred into Murray.

The seasonal determinations against Goulburn at 31 January 2019 was 94% which means 36,259ML of Snowy Environmental Reserve will be transferred at the end of this season, increasing the volume owed from the Goulburn system to the Murray system. This will reduce the opportunity to trade out of the Goulburn system to approximately 50,000ML based on the current numbers.

Furthermore, the seasonal determinations against the exchange-rate trade entitlement needs to be added to the Goulburn IVT account balance. This equates to approximately 1GL for each 1% of seasonal determination in the Goulburn. Under average inflow conditions forecast for 2019/202, this would equate to approximately 15GL on 1 July, reducing the opportunity to trade out of the Goulburn system to around 35,000ML when trade opens in early July 2019.

Summary

This article will be updated as more information comes to hand.

It will pay to keep a close eye on the balance of the Goulburn IVT as we head toward the end of the season as significant changes could occur as water is moved to balance accounts or seek parking/carryover space.