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East Gippsland Water

10 August 2011

Mitchell River System Water Supply Demand Strategy

AECOMMitchell River System Water Supply Demand Strategy

C:\Users\wallners\Documents\2Work\EGW\Final Draft_MRWSS Water Supply Demand Strategy.docx Revision E - 10 August 2011

Mitchell River System Water Supply Demand Strategy

60144336

Prepared for

East Gippsland Water

Prepared by AECOM Australia Pty Ltd Level 9, 8 Exhibition Street, Melbourne VIC 3000, Australia T +61 3 9653 1234 F +61 3 9654 7117 www.aecom.com ABN 20 093 846 925

10 August 2011

60144336

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Quality Information Document Mitchell River System Water Supply Demand Strategy

Ref 60144336

Date 10 August 2011

Prepared by Nick Clarke and Steven Wallner

Reviewed by Steven D’Agata

Revision History

Revision Revision Date Details Authorised

Name/Position Signature

A 8-Feb-2011 Initial draft Chris Cook Team Leader - Bairnsdale

Original Signed

B 17-May-2011 Draft for review by Technical Review Committee

Chris Cook Team Leader - Bairnsdale

Original Signed

C 22-Jun-2011 Revised draft for review by Technical Review Committee


Original Signed

D 28-Jun-2011 Final draft for review by Technical Review Committee


Original Signed

E 10-Aug-2011 Final Chris Cook Team Leader - Bairnsdale

Original Signed



Table of Contents Executive Summary 1 1.0 Introduction 6

1.1 Regional Setting 7 2.0 Current Water Supply 8

2.1 Description of Water Supply System 8 2.1.1 Overview 8 2.1.2 Mitchell River 9 2.1.3 Nicholson River 9 2.1.4 Key Pump Stations 9 2.1.5 Storages 9 2.1.6 Water Treatment Plant(s) 10 2.1.7 Transfer Pipelines 10 2.1.8 Recycled Water 11 2.1.9 Groundwater 11 2.1.10 Aquifer Storage and Recovery 11

2.2 Allocation of Water 12 2.2.1 Bulk Water Entitlements 12 2.2.2 Licensed Diversions 13 2.2.3 Groundwater licences 13

2.3 Level of Service Objectives 14 2.4 Historical Water Restrictions 14

3.0 Previous Long Term Planning Studies 15 3.1.1 Mitchell River Water Supply System – Bulk Delivery and Water Quality

Improvement (EarthTech, 2003) (“The Blue Report”) 15 3.1.2 Drought Response Plan for Mitchell River Water Supply System (SKM, 2006) 15 3.1.3 EGW Water Supply and Demand Strategy (SKM, 2007) 15 3.1.4 Mitchell River Water Quality Improvements - Toorloo Reservoir Options

(AECOM, 2009) 15 3.1.5 Combined Impact of the 2003 and 2006/07 Bushfires on Streamflow –

Broadscale Assessment (SKM, 2009) 15 3.1.6 Draft Gippsland Region Sustainable Water Strategy (DSE, 2010) 15 3.1.7 Water Resource Modelling for the Amendment of the Mitchell River Urban Bulk

Entitlement (SKM, 2010) 16 3.1.8 Aquifer Storage and Recovery investigations (various, 2010) 16

3.2 Regulations and Legislation 16 3.2.1 Surface Water Caps 16 3.2.2 Streamflow Management Plans 16 3.2.3 Groundwater Caps 17 3.2.4 Victorian River Health Strategy 18 3.2.5 Victorian Strategy for Healthy Rivers, Estuaries and Wetlands (under

development) 18 3.2.6 Regional River Health Strategy (2005 – 2010) 19 3.2.7 Heritage Rivers 19 3.2.8 Legislation 19

4.0 Water Demand 20 4.1 Current Demand 20

4.1.1 Spatial Demand 21 4.1.2 Seasonal Demand 22 4.1.3 Non-residential Water Use 22 4.1.4 Major Water Users 22 4.1.5 Unaccounted Water 23

4.2 Forecast Water Demand 24 4.2.1 Victoria in the Future 24 4.2.2 Census Data 25 4.2.3 East Gippsland Shire Council Projections 25



4.2.4 Impacts of Demand Management and Climate Change 25 4.2.5 Adopted Growth Scenarios 26

5.0 Demand Management 27 5.1.1 Current Demand Reduction Initiatives (SKM, 2007) 27 5.1.2 Future Demand Reduction Initiatives (SKM, 2007) 28

6.0 Water Supply 30 6.1 Risks and Uncertainties 30

6.1.1 Impact of Climate Change 30 6.1.2 Step Change Scenario 31 6.1.3 Impact of Bushfires 32 6.1.4 Forestry 35

6.2 Future Reliability of Groundwater 35 6.2.1 Climate Change 35 6.2.2 Aquifer Reliability 35

7.0 Reliability of Supply 37 7.1 REALM Modelling 37

7.1.1 Key Assumptions 37 7.2 Current Reliability of Supply 38 7.3 Future Reliability of Supply 38

7.3.1 Short Term System Performance 38 7.3.2 Benefits of ASR as a bulk storage option for the Mitchell System 39 7.3.3 Long Term System Performance 40

8.0 Assessment of Options 42 8.1 Options Briefing Paper 42 8.2 Options screening 42 8.3 Optioneering Report 43 8.4 Assessment workshop 45 8.5 Strategy 46

8.5.1 Hierarchy of Options 46 8.5.2 Short term strategy 46 8.5.3 Long term strategy 47

8.6 Indicative Costs 47 9.0 Conclusions and Recommendations 48 10.0 References 49 Appendix A

MRWSS Schematic A Appendix B

Options Briefing Paper B Appendix C

Issues Optioneering Report C


C:\Users\wallners\Documents\2Work\EGW\Final Draft_MRWSS Water Supply Demand Strategy.docx Revision E - 10 August 2011 1

Executive Summary Water Supply Demand Strategies (WSDS) aim to ensure that an appropriate balance is maintained between urban water supply and demand over the long term planning horizon of 50 years. East Gippsland Water (EGW) finalised their WSDS for all water supply systems during 2007 (SKM, 2007) and is in the process of reviewing these strategies following a period of extended drought and impacts from bushfires. AECOM Australia Pty Ltd (AECOM) has been engaged by EGW to revise the existing WSDS for the Mitchell River Water Supply System (MRWSS) which includes the towns of Bairnsdale, Paynesville, Lindenow, Lindenow South, Eagle Point, Lucknow, Newlands Arm, Banksia Peninsula, Raymond Island, Lakes Entrance, Lake Tyers Beach, Nowa Nowa, Swan Reach, Sarsfield, Nicholson, Johnsonville, Metung, Bruthen and surrounding areas.

Background

The previous WSDS (SKM, 2007) for the system concluded that there was adequate supply and infrastructure to meet Level of Service (LOS) obligations within a 50 year horizon. However, this was premised on a number of key assumptions:

provision of a substantial allocation of 2,500 ML/year (which has not eventuated) climate change predictions (Jones and Durack, 2005) that have subsequently been revised some consideration of bushfire impacts, though at a lower extent than that subsequently modelled for DSE population projections from 2003 Victoria in Future (based on the 2001 census), which were increased

significantly in the 2008 revision (following the 2006 census) a total system live bulk storage volume of 1,818 ML streamflow records available at the time. which did not include the significant low flow event of 2006/07 a 2,993ML bulk entitlement on the Nicholson River held by EGW for access as an emergency response

measure. Although these assumptions were correct at the time, changing conditions and evolving science has led inevitably to the need to revise these assumptions for the current WSDS, which includes:

climate change projections from South Eastern Australia Climate Initiative (SEACI) currently recognised within the industry as the most applicable. These predict a more severe impact on streamflows in the future

results from modelling undertaken for DSE estimating the collective impact of bushfires in 2002/03 and 2006/07, which burnt a substantial proportion of the catchment and may lead to a significant (temporary) reduction in runoff and streamflows

demand in recent years has stagnated rather than increasing as projected in the previous WSDS population projections from 2008 Victoria in Future streamflow records including recent low flows (2006/07) a live bulk storage volume of 1,506 ML acquisition of a groundwater allocation of 120 ML/year potential for Aquifer Storage and Recovery (ASR) (at the time of writing, an application for an ASR licence

for 500 ML/year was pending and anticipated to be granted by Southern Rural Water during 2011) transfer of bulk entitlements from the Nicholson and Tambo Rivers to the Mitchell River entirely under

Winterfill conditions. Reliability of Supply Modelling

EGW has set Level of Service (LOS) objectives for water supply reliability. The objectives state that:

Moderate restrictions (Stages 1 & 2) are not desired more frequently on average than 1 year in 10; and; More severe restrictions (Stages 3 & 4) are not desired more frequently than 1 year in 15.

These LOS objectives have been used as a basis for assessing the adequacy of the MRWSS for meeting current and future water demand.



REALM modelling of the revised conditions in the MRWSS now indicates that EGW will need to augment current infrastructure in order to meet LOS targets within the MRWSS into the future. It is estimated that by 2018 (the conclusion of the next Water Plan period), that between 2000ML and 2,500ML of total storage will be required, depending on the scenario modelled (or an additional 500ML to 1,000ML above current capacity, predominantly at Woodglen). Based on an intermediate (neither best nor worst case) modelling scenario for climate change, bushfire impacts and demand, it is estimated that an additional 700ML of storage is required to meet service levels by 2018.

EGW’s pending ASR licence for 500 ML/year will contribute to meeting a portion of this requirement (although the constraints currently imposed by daily extraction rates and other operating conditions restrict utilisation of the licence capacity to its fullest extent). It is recommended that EGW investigate the opportunity to expand ASR in terms of both extraction rate and overall capacity, in order to optimise the volume of storage that can be provided by this approach. Any remaining additional bulk storage that is required should be constructed at Woodglen, to achieve a total equivalent bulk storage volume in the system of 2,200ML (current storage of 1,500 ML plus the additional 700 ML required).

This reversal from the findings of the previous WSDS is due to the combined impacts from changes in key inputs and assumptions, particularly:

provision of a significant groundwater allocation of 2,500 ML/year (which has not eventuated) reduction in available storage resulting from EGW’s Water Quality Improvement Program a greater impact from climate change than previously projected population projections twice those of previous estimates more severe impacts on streamflow predicted from recent bushfires transfer of bulk entitlements from the Nicholson and Tambo Rivers to the Mitchell River entirely under

Winterfill conditions. It is evident that climate change and population projections, in particular, not only influence results significantly, but also produce the greatest uncertainty. This therefore reflects the importance for EGW to adopt a flexible strategy capable of addressing both immediate and short-term requirements. The strategy also needs to be able to be readily updated and adjusted in response to revised projections which may eventuate in the future.

Options Assessment

Options to improve reliability of supply for the MRWSS were identified and screened in consultation with key management and operations staff at both EGW and AECOM. The following short listed options were considered suitable for further consideration. Table 1: Short listed options

Solution type Option identified

Surface water storage

Additional raw water storage (Woodglen 3) Toorloo Water Treatment Plant (WTP)^ Aquifer Storage and Recovery (ASR)

Demand management Demand management

Alternative water supplies

Recycled water Stormwater Seawater desalination Desalination of brackish groundwater

^Included as a storage option since the WTP would facilitate use of the temporarily decommissioned Toorloo Reservoir

A number of options identified in the assessment process were considered fundamentally inappropriate at present (‘fatally flawed’) for economic, social, environmental, technical or political reasons. These options were screened out and not considered any further in the assessment process.



Table 2: Options screened out due to fatal flaws

Solution type Option identified Reason for not taking forward Additional entitlements Surface water – additional

entitlements Politically and socially untenable while EGW has sufficient existing allocations

Groundwater – additional entitlements^

Politically and socially untenable to seek additional entitlements (currently fully allocated)

Surface water diversion and storage

Increased diversion capacity Modelling indicates there is no demonstrable benefit

Line and cover Wy Yung and Sarsfield Reservoirs

Retention times would exceed EGW’s target and unreasonably jeopardise water quality Line and cover Toorloo

Reservoir Alternative water supplies Rainwater Considered technically flawed since

security of supply not provided during dry periods

Innovative Options Desalination barge Only consider further if desalination is to be included in EGW’s future water supply portfolio

Green City Future option. Raise with Council to determine support

Direct Potable Reuse Not part of current government policy. Review in future WSDS updates

Regional Water Grid This option is not recommended as the benefit to cost ratio is likely to be low

Transfer entitlements from La Trobe Valley power stations

Given the uncertainty associated with this option it is not recommended at this point in time

Flexible Corporate Water Licence

Future option. EGW to initiate discussions with the relevant agencies to determine whether or not this option is likely to be viable

Other Reduced Level of Service EGW to assess during Water Plan 3 development

Water cartage Infeasible at the scale of the MRWSS ^Pursuit of additional groundwater entitlements is not considered a viable option at present. However, changing circumstances may result in this being considered in future revisions of the WSDS.

Assessment of the short listed options was completed using EGW’s multi criteria assessment (MCA) framework, which was developed to assess all projects being considered for inclusion in the next Water Plan (2013 – 2018). The results of the MCA were adjusted following the outcomes of a workshop held between key AECOM and EGW staff to discuss the preliminary options assessment. Due to the high degree of uncertainty surrounding some of the costs and the potential for external funding for some options, a number of costing scenarios have been assessed as a sensitivity analysis of the final rankings. The results of the MCA for these scenarios are shown in Table 3.



Table 3: Multi Criteria Assessment Results

Option rankings from MCA based on cost scenarios

Rank Scenario 1 Score Scenario 2 Score Scenario 3 Score 1 ASR 4.19 ASR 4.22 ASR 4.19 2 Woodglen 3 3.55 Woodglen 3 3.69 Woodglen 3 3.54 3 Demand Management 3.19 Stormwater 3.02 Stormwater 3.30 4 Toorloo WTP 2.75 Toorloo WTP 2.93 Demand Management 3.18 5 Recycled Water 2.63 Demand Management 2.89 Recycled Water 3.13 6 Stormwater 2.60 Recycled Water 2.84 Toorloo WTP 2.73

7 Brackish Groundwater Desalination 2.35 Brackish Groundwater

Desalination 2.56 Brackish Groundwater Desalination 2.33

8 Seawater Desalination 2.28 Seawater Desalination 2.53 Seawater Desalination 2.25 Strategy

From the outcomes of the assessment process, a hierarchy of options was created to inform the short term and long term strategies for improving reliability of supply in the MRWSS. In the short term to 2018, REALM modelling has indicated that EGW would need to construct the equivalent of 700ML of additional usable or live storage. The implementation of ASR will contribute to meeting a proportion of this storage requirement, which EGW should seek to optimise by investigating expansion beyond the pending licence for 500 ML/year. Any remaining deficit in storage should then be met by the construction of additional storage at Woodglen. It is recommended that EGW should, in the short term, undertake the activities listed in Table 4. Table 4: Short term recommendations

Recommendation Comment Complete a new Master Plan for the system To provide a holistic evaluation of the capacity, operation

and security of the MRWSS. This would inform future bulk supply options assessments that will be completed as part of future updates of the WSDS or Water Plan assessments.

Implement ASR (to the maximum extent possible) Investigate expansion of this scheme beyond the current extraction limitations and capacity (ie. the pending licence for 500 ML/year)

Investigate site constraints at Woodglen To confirm availability of suitable land and ground conditions at Woodglen in the event that ASR is unable to be expanded to meet short or long term storage requirements

Continue to implement demand management and leakage reduction programs

Where cost effective, as a means of deferring future supply augmentation requirements.

Investigate and implement stormwater and recycled water opportunities where cost effective

Pursue external funding opportunities for these alternative water supplies, which will defer and reduce the scale of future supply augmentations, including desalination (see long term strategy).

Investigate the feasibility of brackish groundwater and seawater desalination

This includes a more thorough assessment of costs to inform future updates to the WSDS.

In the longer term to 2060, in order of priority, EGW would need to:

1) Continue to pursue ASR to reduce the volume of bulk storage or alternative water supply (desalination) required.

2) To the extent that ASR cannot be expanded to meet EGW’s target LOS objectives, additional bulk raw water storage should be constructed at Woodglen (pending the investigation of suitable sites).

3) To facilitate diverse and sustainable supply EGW should continue to pursue demand management, recycled water and stormwater harvesting schemes where cost effective and as technology and external funding permits.



4) Implement desalination (up to 10ML/d capacity) as a final resort once all other viable alternative sources have been fully allocated, in order to meet the remaining deficit in supply.

Indicative Costs for Short Term Recommendations

The following costs are high level estimates only (+50%/-30%) and should be confirmed during conceptual design for construction projects or at the proposal stage of planning studies. Table 5: Indicative Costs

Project Cost Master Plan Allow $200,000 ASR Establishing ASR will incur additional operating costs

of between $100,000 and $150,000 per year, reducing over time to approximately $50,000 for proposed 500 ML/year scheme Allow $200,000 to undertake additional investigations to determine viability of expanding ASR to meet additional storage requirements

Investigate site constraints at Woodglen or other location, for potential additional storage if needed

Allow $100,000, including geotechnical investigation Allow $15 million for the provision of alternative bulk storage arrangements should the above ASR investigations be unsuccessful in securing additional supply/storage

Demand management and leakage reduction Dependant on extent of implementation Investigate recycled water and stormwater Allow $500,000 for initial desktop studies and funding

applications Complete initial desktop assessment of feasibility of desalination

Allow $50,000

Note: the predominant focus of this strategy is reliability of (drought) supply. Although the strategy considers issues of security of supply (emergencies), water quality and capacity augmentations, the analysis is based on a high level assessment. A separate, more comprehensive and holistic Master Plan is recommended to investigate these aspects in more detail, the findings of which may impact the final recommendations of this strategy.



1.0 Introduction Water Supply Demand Strategies (WSDS) aim to ensure that an appropriate balance is maintained between urban water supply and demand over the long term planning horizon of 50 years. East Gippsland Water (EGW) finalised their WSDS for all water supply systems during 2007 and is in the process of reviewing the strategies for water supply systems that are experiencing shortages resulting from the combined impacts of the ongoing drought, climate change and bushfires. WSDSs are otherwise required to be reviewed and updated every 5 years.

Continuing dry conditions have resulted in a significant drop in streamflow right across Victoria in the past decade, and East Gippsland has not been exempt from these impacts. CSIRO have determined that climatic conditions are tracking above the previous high climate change scenarios, which suggests that the medium climate change scenario that was recommended by Department of Sustainability and Environment (DSE) during preparations of the earlier WSDSs may over-estimate long term yields (AECOM, pers. comm, 2010).

The Mitchell River Water Supply System (MRWSS) includes all towns supplied by the Mitchell River from the off-take at the Glenaladale Pump Station. The towns supplied by the MRWSS include Bairnsdale, Paynesville, Lindenow, Lindenow South, Eagle Point, Lucknow, Newlands Arm, Banksia Peninsula, Raymond Island, Lakes Entrance, Lake Tyers Beach, Nowa Nowa, Swan Reach, Sarsfield, Nicholson, Johnsonville, Metung, Bruthen and surrounding areas.

The MRWSS is EGW’s largest system, supporting a number of regionally important commercial and industrial customers as well as a significant tourist population.

The previous WSDS concluded that the MRWSS would not require any supply enhancements during the 50 year planning period if the impact over the next 10 to 20 years from the bushfires of 2003 and 2006 was not significant (as anticipated at the time). This conclusion also assumed that a 2,500ML/year groundwater licence would be granted. It was recommended that the adequacy of the MRWSS be re-assessed upon release of a study undertaken by DSE on the impacts of the bushfires.

The DSE’s 2009 report into the broad scale impact on water yields from the bushfires identifies a maximum potential reduction in streamflow of 10% for the Mitchell River, with the impact expected to be greatest at 2025. The report also notes, however, that it is not clear how the combined impacts of bushfire and climate change will ultimately influence streamflows in the future.

The Draft Gippsland Region Sustainable Water Strategy, released in August 2010, observes that the reduction in streamflows experienced in the past 13 years have been more severe than the reductions predicted under a high climate change scenario, and that it is therefore necessary to plan for a possible continuation of these low inflows. The Strategy seeks to provide a framework for securing water resources in the Gippsland Region for the next 50 years.

EGW has also undertaken a number of major projects since the previous WSDS as part of its program of water quality improvement. The Woodglen Water Treatment Plant was commissioned in 2010, along with a second major raw water storage at this site. Several other storages have been lined and covered, or in some instances taken offline or replaced with tanks. Successful Aquifer Storage and Recovery (ASR) trials at the Woodglen borefield are anticipated to result in Southern Rural Water (SRW) issuing a licence permitting up to 500 ML/year of water to be injected into the aquifer for storage and subsequent extraction.

EGW also successfully sought to transfer its bulk entitlements for water from the Nicholson and Tambo Rivers to a new winterfill bulk entitlement for the Mitchell River. This was gazetted in October 2010. The entitlement transfer enables EGW to consolidate water supply infrastructure around a single, reliable water supply source and permits EGW to take an additional 3,306 ML/year between July and October from the Mitchell River.

In the context of these significant developments, it is prudent to update the WSDS for the MRWSS.

Where possible, this strategy has been prepared in accordance with the DSE’s Guidelines for the Development of a Water Supply Demand Strategy (DSE, 2005), and briefing papers issued by DSE during the ongoing development of the updated guidelines (due for release in mid 2011).



1.1 Regional Setting The MRWSS is EGW’s largest water supply system, extending from Lindenow in the west to Nowa Nowa and Lake Tyers in the east, and servicing the major regional centres of Bairnsdale and Lakes Entrance. The MRWSS covers an area of approximately 1,400 km2 servicing 17 towns and their surrounding areas.

The region incorporates a number of significant environmental assets, including national parks, state forests, heritage-listed rivers and internationally recognised wetlands. Major industries include agriculture (dairy, beef and vegetable production), forestry and tourism, particularly around the Gippsland Lakes.

The Princes Highway is the main transport route through the region, a popular tourist destination that attracts many visitors every year. The population within the towns of the MRWSS is estimated at 26,794 (2006 Census), but this population increases considerably during the summer months and other holiday periods.

Bairnsdale, located 285 km east of Melbourne, is the region’s largest town, with a population of around 11,300 (ABS, 2009). This population is forecast to almost double by 2060. Located on the Mitchell River, Bairnsdale is the gateway to East Gippsland’s coastal, lake, alpine, forest and rural environments.

Approximately 15 km south of Bairnsdale and located in the middle of the Gippsland Lakes, Paynesville is a sizeable township with a permanent population of close to 3,500 (ABS, 2009). Paynesville and the nearby towns of Eagle Point, Newlands Arm and Raymond Island are characterised as lakeside resort towns that attract many visitors during summer and other holiday periods.

Lakes Entrance is the region’s most popular tourist destination and is situated both on the Gippsland Lakes and Ninety Mile Beach, approximately 320 km east of Melbourne. Lakes Entrance is also a major fishing port but tourism is regarded as the town’s main industry.

The locations of key components of the MRWSS are shown in Figure 1.

Figure 1: Key components of the Mitchell River Water Supply System (Source: Google Earth)



2.0 Current Water Supply

2.1 Description of Water Supply System 2.1.1 Overview

The MRWSS is EGW’s largest water supply system, servicing a population of more than 26,000 in 17 towns and their surrounding areas, including the major centres of Bairnsdale and Lakes Entrance. Raw water into the system is supplied from the Mitchell River. Historically, EGW also had the option of using flows from the Nicholson River to augment raw water supply during times of drought. However, EGW’s Bulk Entitlement for the Nicholson River has recently been transferred to the Mitchell River as winterfill in order to provide greater security of supply.

The system comprises the 30 ML/d Glenaladale offtake on the Mitchell River, a single water treatment plant with a capacity of 20ML/day, a number of water storages and tanks, and 21 pump stations. EGW constructed five groundwater bores at Woodglen in 2007 to provide emergency supply when the Mitchell River deteriorated significantly in quality following major bushfires in the catchment. A full schematic of the system can be seen in Appendix A. A simplified schematic is shown in Figure 2.

Figure 2: Schematic diagram of the Mitchell River Water Supply System

EGW has been undertaking a water quality improvement program in the MRWSS for a number of years, resulting in some significant augmentations and modifications to the system. Further details on these works and other components of the supply system are described in the following sub-sections.

As EGW’s largest water supply system, the MRWSS has a relatively high degree of operational complexity. The ‘Blue Report’ (see Section 3.1.1) remains the most comprehensive and up-to-date summary of the operation of the MRWSS as a whole, and should continue to be consulted as the key reference for operational details of the MRWSS until updated.



2.1.2 Mitchell River

The heritage listed Mitchell River begins at the confluence of the Dargo and Wonnangatta Rivers. The upper reaches of its catchment predominantly feature forested public land. This includes sections of the Alpine National Park and Mitchell River National Park. The river flows through high cliffs and several gorges, including the Den of Nargun, which is mentioned in aboriginal legends. The lower reaches of the Mitchell flow through Bairnsdale, the major population centre for the region, before entering the Gippsland Lakes (EGCMA, 2009).

The Mitchell River is the largest unregulated river in Victoria, completely free of barriers to its natural flows. The Mitchell River is now the sole water supply for all towns within the MRWSS. The river off-take and pump station are located within the Mitchell River National Park approximately 2.5km upstream of the Glenaladale Bridge.

2.1.3 Nicholson River

The Nicholson River is 72.5 km in length and flows from forested upland areas to the estuarine reach where the Nicholson River enters the Gippsland Lakes. The entire upper catchment of the Nicholson River is public land managed as State Forest (EGCMA, 2009).

EGW successfully negotiated the transfer of their bulk entitlement of 2,993 ML/annum for the Nicholson River to the more reliable and better quality supply source of the Mitchell River. The bulk entitlement for the Nicholson River was previously held to ensure that a secondary surface water supply was available for emergency response during a drought situation. However, water supplied from the Nicholson River received no treatment apart from disinfection. It therefore could not meet EGW’s water quality objectives and could not be considered a viable alternative to supply from the Mitchell River.

EGW’s bulk entitlement of 2,993 ML/annum from the Nicholson River was revoked on 28 September 2010 and the corresponding increase in bulk entitlement from the Mitchell River was gazetted on October 7 2010.

2.1.4 Key Pump Stations

The Glenaladale Pump Station is located within the Mitchell River National Park approximately 2.5km upstream of the Glenaladale Bridge. The pump station has a capacity of 30 ML/d, or 350 L/s. Raw water with turbidity as high as 60 NTU has been drawn from this source in the past and this can result in the formation of algae in the raw water basin. To prevent this occurrence, a water quality trigger of 30 NTU is currently in place and turbidity measurements in excess of this trigger result in the shutting down of the pump station.

The pump station includes recently installed VSD motors and new pumps which operate in a duty/standby arrangement. Raw water is delivered through a 600mm supply main to the Woodglen storage.

2.1.5 Storages

The MRWSS has a combined bulk storage volume of 1506 ML across 4 storage basins. A brief summary of each of the storages is provided in Table 6. Table 6: Bulk storages within the MRWSS

Storage Total Volume (ML)

Dead Storage (ML)

Live Bulk Storage (ML)

Operational Storage (ML)

Woodglen #1 848 100 748 0 Woodglen #2 713 18 698 0 Wy Yung 86 16 40 30 Sarsfield 6 0 0 6 Sunlakes 45 20 25 Toorloo (Not currently in service)

(450) (50) (400) (0)

TOTAL 1698 118 1506 61

As part of EGW’s strategy to improve water quality in the MRWSS, all open storages (downstream of the Woodglen Water Treatment Plant) have been either covered or removed from service. A second Woodglen raw water storage was commissioned in 2010 to provide an additional 713 ML (698 ML live storage) capacity and greater operational flexibility, though several other reservoirs have been taken offline to protect water quality. The



largest of these is the Nicholson Dam, which has been made redundant by the transfer of EGW’s entitlement on the Nicholson River to the Mitchell River as winterfill.

The future of the Nicholson dam is currently being considered by EGW and other stakeholders, including DSE and the East Gippsland Catchment Management Authority.

The other major storage to be removed from service is Toorloo Reservoir, which was previously utilised to supply peak demand to Lakes Entrance.

A study in 2009 (AECOM) confirmed that, with minor operational modifications, the Bulk Water Supply System has the capacity to operate without the Toorloo Reservoir in the short term (10 years). It was therefore recommended that Toorloo be temporarily decommissioned to maintain the required water quality standards in Lakes Entrance. In the meantime, options for augmenting peak supply into Lakes Entrance under future demand conditions would be investigated and these options would include retaining storage at this site. The 2009 study also recommended that the updated WSDS assess the impact that removing Toorloo from operation has on long term supply security, particularly during drought scenarios.

Since the previous WSDS, EGW’s water quality improvement program has included removing the following open storages from service:

Toorloo Reservoir (450 ML) Wy Yung basin No. 2 (88 ML); Sarsfield Reservoir (160 ML) – replaced with one 6 ML tank; Eagle Point Reservoir (90 ML) – replaced with two 6 ML tanks; and Nicholson River dam (640 ML).

2.1.6 Water Treatment Plant(s)

The Woodglen Water Treatment Plant (WTP) was commissioned in July 2010. The WTP employs a Dissolved Air Flotation and Filtration (DAFF) process and has the ability to treat up to 20ML/day. The WTP is designed to treat water from the Mitchell River with a turbidity of up to 100 NTU if necessary. The DAFF plant includes two 10 ML/d tanks and some components of the works are sized for the addition of a third tank, which will permit future treatment capacity to increase to 30 ML/d.

The previous WSDS included EGW’s plans to construct a second WTP at Toorloo Reservoir. However, confirmation that Toorloo Reservoir was not required to meet peak demands in the short term means that the Toorloo WTP is not a feature of this WSDS. This WTP was removed from EGW’s 2008-2013 Water Plan but remains an option to permit the future use of the Toorloo Reservoir in the longer term.

2.1.7 Transfer Pipelines

The transfer pipeline between the Woodglen WTP and Wy Yung basin has a capacity of 24 ML/d, which is sufficient to deliver the capacity of the 20 ML/d plant itself. Flow and pressure in this concrete pipeline is restricted by the presence of air vents. The pipe has also reportedly been constructed very deep in sections, making it difficult to access for repairs.

The 13.5km, 375mm Main Supply Pipeline (MSPL) between Wy Yung basin and the Nicholson River crossing is known to experience high pressures in some locations and therefore has an increased risk of failure. It is anticipated that this main will require augmentation in approximately 10 years (AECOM, 2009). From the crossing of the Nicholson River to the Sarsfield tank (approximately 5.5km), the MSPL is a 300mm diameter pipeline. EGW brought forward the replacement of this main as a means of increasing the water transfer capacity into Lakes Entrance. This project replaced the Toorloo WTP in the 2008-13 Water Plan capital budget and construction of the new main was completed in 2010.

The previous WSDS recommended the following transfer capacity upgrades:

Pipeline upgrades to approximately 7.1 ML/d capacity from Wy Yung to Sarsfield by 2011 and to 8.6 ML/d by 2017;

Pipeline upgrades to approximately 10 ML/d capacity from Sarsfield to Sunlakes occurring progressively as demands at Lakes Entrance increase.



These recommendations have since been superseded by an investigation into the implications of removing the Toorloo reservoir from service (AECOM, 2009) which includes consideration of the operational capacity of the MSPL.

2.1.8 Recycled Water

EGW currently recycles 100% of the wastewater generated within their area of service, with the majority of recycled water used within the towns of the Mitchell River water supply area. The key population centres where wastewater was treated and reused during the 2008/09 financial year are listed in Table 7. Table 7: Recycled water use in East Gippsland

Treatment Plant Volume collected, treated and reused, 2008/09 (ML) End Use

Lakes Entrance 625.6 Agriculture - 90% Urban and Industrial – 10%

Lindenow 6.5 Wetlands

Metung 104.7 Agriculture

Bairnsdale 1,110.1 Wetlands (Macleod Morass) – 97% Urban and Industrial – 2% Agriculture – 1%

Paynesville 230.5 Agriculture (source: http://www.egwater.vic.gov.au/Environment/WaterRecycling/tabid/104/Default.aspx)

The vast majority of recycled water from Bairnsdale (which in turn represents more than half of the wastewater treated in the towns of the MRWSS) is discharged to Macleod Morass and provides an important source of fresh water into this wetland. The Draft Gippsland Region Sustainable Water Strategy (DSE, 2010) reports that some of this recycled water could be utilised for irrigation or industry, but the importance of the flows to the environment limits the potential for alternative uses of this water.

Macleod Morass is a deep, freshwater marsh that provides habitat for hundreds of species of birds, fish, insects, mammals, reptiles and frogs, including a number that are endangered and protected under the Environment Protection and Biodiversity Conservation (EPBC) Act (1999). The morass is dependent on the Bairnsdale WWTP as an ongoing source of freshwater, and a significant variation to this flow regime could potentially trigger a referral under the EPBC Act.

2.1.9 Groundwater

During May of 2007, EGW commenced the construction and development of a groundwater borefield at Woodglen in order to supplement water supply during periods of low or poor quality flow in the Mitchell River. A total of five bores have been constructed to date, tapping into the Latrobe Valley Group of aquifers at a depth of around 60m. These bores have a total reported capacity of 3.7 ML/d. From the borefield, water is transferred to Woodglen reservoir or directly to the WTP.

Though Southern Rural Water (SRW) have to date refused to grant a licence for extraction due to declining water levels in the aquifer, EGW was successful in purchasing an allocation of 120 ML which was transferred to the Woodglen borefield (AGT, 2010).

EGW has subsequently conducted trials for Aquifer Storage and Recovery, as detailed in the following section.

2.1.10 Aquifer Storage and Recovery

EGW conducted trials between December 2009 and May 2010 to investigate the potential to use the Woodglen borefield to implement an Aquifer Storage and Recovery (ASR) scheme. This is premised on taking water from the Mitchell River during periods of high flow and quality (now facilitated in particular by the new winterfill bulk entitlement) for temporary storage in the two Woodglen reservoirs. Water would then be released from the Woodglen storages to gravitate to the borefield and into the aquifer, where it would be stored prior to future recovery at a time when supply from the Mitchell River is less reliable. Water pumped back out of the aquifer would be treated at the Woodglen WTP prior to distribution.



EGW has undertaken a structured and transparent investigation in accordance with the relevant Australian Guidelines for Water Recycling1, overseen by a Steering Committee that includes a broad range of representative stakeholders. SRW granted permission to inject a maximum of 300 ML into the Latrobe Valley Group (LVG) of aquifers as part of ASR investigations, which included the implementation of a groundwater monitoring program and development of a groundwater numerical model to subsequently predict the aquifer response to large-scale injection and extraction (AGT, 2010).

The trials demonstrated that a 500 ML/year ASR scheme is viable using the existing Woodglen borefield. The licence application is currently pending approval by SRW.

2.2 Allocation of Water 2.2.1 Bulk Water Entitlements

EGW currently has a bulk entitlement of 5,902 ML for the MRWSS. Conditions of this licence were originally detailed in the Bulk Water Entitlement (Bairnsdale) Conversion Order 2000. The diversion rules under the conversion order are summarised in Table 8.

Table 8: Diversion Rules for EGW’s Mitchell River Bulk Entitlement

Mitchell River Flow upstream of Glenaladale Pump Station (ML/day)

Allowable Diversion (ML/day)

Passing Flow (ML/day)

0 0 0 30 0 30 46 16 30 246 16 230 265 35 230 >265 35 >230

EGW also formerly held entitlements for the Nicholson and Tambo Rivers, but has successfully applied to transfer these entitlements to the Mitchell River. In October 2010 the entitlements were consolidated into a single winter fill bulk entitlement for 3,306 ML/year from the Mitchell River, which may be harvested between July and October inclusively at a maximum pump rate of 60 ML/d, and a passing flow requirement of at least 600 ML/day (as summarised in Table 9). This is in addition to the existing bulk entitlement of 5,902 ML/year that EGW is permitted to take from the Mitchell River at any time of the year (subject to the diversion rules indicated in Table 8). Table 9: Conditions of EGW”s winterfill Bulk Entitlement

Volume Winterfill Months Maximum Diversion Minimum Passing Flow 3,306 ML July to October inclusive 60 ML/d 600 ML/d

The bulk entitlements of 2,993 ML/year and 313 ML/year for the Nicholson and Tambo Rivers respectively have therefore been revoked.

The entitlement transfer enables EGW to consolidate water supply infrastructure around a single, reliable, high quality water supply source. As part of the transfer process, EGW facilitated comprehensive modelling (SKM 2010), as well as undertaking extensive stakeholder consultation with the DSE, East Gippsland Catchment Management Authority, SRW, Gippsland Coastal Board, Mitchell River irrigators, and the East Gippsland community.

1 Relevant guidelines include the Australian Guidelines for Water Recycling: Augmentation of Drinking Water Supplies (May 2008) and Managed Aquifer Recharge (July 2009), released as part of the National Water Quality Management Strategy, Australian Guidelines for Water Recycling: Managing Health and Environmental Risks (Phase 2), and published by the Natural Resource Management Ministerial Council, Environment Protection and Heritage Council, and National Health and Medical Research Council



Further details of the amended bulk entitlement are outlined in the Victorian Government Gazette (7 October 2010), which can be seen at http://www.gazette.vic.gov.au/gazette/Gazettes2010/GG2010G040.pdf (p 2381).

It should be noted that EGW do not have access to any flow transferred by another entitlement or licence holder.

2.2.2 Licensed Diversions

SRW provides an overview of local management rules for each of the river catchments in their jurisdiction on a regular basis. The latest review of these rules was issued in September 2009. The management rules not only provide operational guidelines, but also a summary of licences held within each catchment. A summary of licences held on the Mitchell River is show in Table 10. Table 10: Number and volume of licences issued for the Mitchell River (SRW, 2009)

Water Use Number of licences Volume (ML)

Direct Pumping 89 10,567 IR Conditional̂ 40 2,200 Domestic and Stock Licences 83 253 Bulk Entitlements (EGW) 1 5,902 Dairy 19 57.8 Commercial 2 42.2 Winterfill^^ 5 1,200 Total 239 20,222 ^ Licence issued under Section 51 of the Act that allows the extraction of water at any time of the year for irrigation purposes, subject to the condition that the level of the Mitchell River does not fall below 185ML per day at the Glenaladale gauging site. ^^ Does not include EGW’s new winterfill entitlement of 3,306 ML/year.

As one of the major rivers in East Gippsland, the Mitchell River supplies a high number of users with up to 20 GL/year. EGW’s entitlement represents 25% of licensed diversions from the Mitchell River listed by SRW in 2009. The local management rules include principles for the management of licences, key aspects of which include:

IR (irrigation) diversions are metered, and customers are required not to irrigate more than their licensed volume.

Restrictions are triggered when flows reach 185 ML/day at the Glenaladale gauging station. There is a complex 10-stage roster determined by flow rates at Glenaladale, which indicates the number of hours each customer is entitled to pump.

The conditions of EGW’s Bulk Entitlement as described in Table 8.

2.2.3 Groundwater licences

EGW holds a groundwater entitlement (BEE030074, formerly groundwater licence 9038806) for 120 ML/year from the Woodglen borefield. An initial application to transfer a groundwater licence for 70 ML/year was completed in 2009, and supplemented by a further 50 ML in 2010. The conditions on the current licence are as follows:

Entitlement: 120 ML/year Licence term: 10 years (expires 30 June 2019) Licensed maximum extraction rates:

Table 11: Licensed extraction rates from Woodglen bores

Bore Identification

(Previous bore number)

Maximum pumping rate (ML/day)

Maximum daily extraction (ML/day)

Maximum annual volume (ML/year)

WRK052729 9030173/1 0.427 0.427 120 WRK052730 9030173/2 0.827 0.827

WRK052732 9030173/3 0.827 0.827



Bore Identification

(Previous bore number)

Maximum pumping rate (ML/day)

Maximum daily extraction (ML/day)

Maximum annual volume (ML/year)

WRK052733 9030173/4 0.827 0.827 WRK052734 9030173/5 0.827 0.827

2.3 Level of Service Objectives EGW has previously defined the following LOS objectives for water supply reliability:

Moderate restrictions (Stages 1 & 2) are not desired more frequently on average than 1 year in 10; and More severe restrictions (Stages 3 & 4) are not desired more frequently than 1 year in 15.

Further information on allowed uses under each stage of water restrictions is provided at: http://www.egwater.vic.gov.au/DroughtManagement/DroughtMgmtDisplay.htm

All towns within the MRWSS are currently subject to Permanent Water Saving Rules (which are being applied as part of a Victoria wide strategy).

2.4 Historical Water Restrictions Water restrictions have been imposed on the MRWSS on a number of occasions in the past, including 1982/83, 1984/85 and 1997/98 (SKM, 2006). The previous DRP (SKM, 2006) noted that significant changes had been made to the configuration of the system since the earlier droughts. A summary of the historical incidence of water restrictions (from 1982 to the present) is provided as follows:

1982/83 Flow in the Mitchell River ceased on March 7, 1983, and a trench was dug from an upstream pool at Lamberts Flat to recharge the pumping pool at Glenaladale. It is observed that the supply from Glenaladale is more secure than supply from the rock barrier at Bairnsdale (SKM, 2006)

1984/85 SKM (2006) reported that these restriction were ‘in sympathy’ with restrictions to rural diverters and did not reflect an urban water supply shortage

1997/98 Pumping maintained only for a few hours a day to allow recovery of river pool

6 March 1998 Stage 3 water restrictions introduced

June 1998 Drought ended – assumed that restrictions were lifted

2001 – 2003 Voluntary Restrictions Imposed

13 March 2006 Irrigators on the Mitchell River placed on a total water ban

27 October 2006

Voluntary Restrictions imposed as extended drought conditions persist (EGW, 2007)

22 December 2006 Stage 2 Restrictions introduced, as widespread bushfires impact on large areas of the Mitchell River catchment from December 2006 to February 2007

16 March 2007 Stage 4 water restrictions introduced, following a severe wet-weather event that washes vast quantities of ash and sediment from the bushfires into the Mitchell River, impacting on water quality (EGW, 2007)

29 June 2007 Water restrictions reduced from Stage 4 to Stage 3

27 July 2007 Water restrictions reduced to Stage 1

24 August 2007 Water restrictions removed, following the successful implementation of temporary water treatment to enable water from the Mitchell River to be once again diverted for use.



3.0 Previous Long Term Planning Studies 3.1.1 Mitchell River Water Supply System – Bulk Delivery and Water Quality Improvement

(EarthTech, 2003) (“The Blue Report”)

This report has been the foundation for many subsequent smaller studies. The main objective of the report was to deliver a strategy to improve water quality within the MRWSS. Critical to the recommended strategy was the determination of future infrastructure requirements for storage, treatment and bulk water transfer. This required the evaluation of current and future demands and hydraulic modelling of the entire MRWSS. The model developed in Pipes ++ has since been converted to an InfoWorks WS format, and much of the inputs into EGW’s infrastructure program for improvements to the MRWSS, have been derived from this report.

3.1.2 Drought Response Plan for Mitchell River Water Supply System (SKM, 2006)

Under section 78B and 78C of the Water Industry Act 1994 all authorities holding a retail water licence are required to develop a Drought Response Plan (DRP) for Ministerial approval. The DRP for the Mitchell River Water Supply System aims to provide a framework for ensuring a timely and effective response to water shortages to ensure that social, environmental and economic impacts of shortages are reduced. The DRP included modelling of the MRWSS which was used as a basis for the preparation of the initial WSDS in 2007.

3.1.3 EGW Water Supply and Demand Strategy (SKM, 2007)

This document forms EGW’s previous WSDS for all of its water supply systems and was the basis from which this updated WSDS has been developed. The previous WSDS provides long term strategies for managing available urban bulk water supply and customer demand across each of EGW’s water supply systems, including the MRWSS.

With the completion of the WSDS for the MRWSS in 2011, EGW has now updated and adopted strategies for each of its water supply systems. These now supersede the previous WSDS completed in 2007.

3.1.4 Mitchell River Water Quality Improvements - Toorloo Reservoir Options (AECOM, 2009)

Following operational and infrastructure changes stemming from the recommendations of the Blue Report, a review of the operational capacity of the Lakes Entrance water supply system led EGW to re-evaluate the immediate need for the proposed Toorloo WTP. The resulting study (incorporating hydraulic modelling) determined that, with minor operational modifications, the bulk water supply system to Lakes Entrance has capacity to operate without the Toorloo Reservoir for the next 10 years.

The report identifies a number of issues associated with the temporary decommissioning of Toorloo Reservoir, including the need to determine the long-term future of the reservoir as part of the MRWSS. The report also recommended that EGW remove the Toorloo WTP from the current Water Plan and bring forward planned Main Supply Pipeline (MSPL) replacement projects. A subsequent study by AECOM (memo dated 29 June 2009) was undertaken to identify the optimal size for the 5.5km section of the MSPL between Nicholson River and Sarsfield as a high priority main replacement.

3.1.5 Combined Impact of the 2003 and 2006/07 Bushfires on Streamflow – Broadscale Assessment (SKM, 2009)

Almost 2.4 million hectares in eastern Victoria and southern NSW were burnt in major bushfires in 2003 and 2006/07, with some 130,000 hectares impacted by both fires. As much as 50% of the Mitchell River catchment was burnt in 2006/07, with major implications for water quality in the river at the time.

The large landscape changes resulting from the bushfires will have a significant long-term impact on streamflow, as young regenerating forests consume more available water than the mature forests destroyed by the fires. To assist authorities understand and plan for the resulting impacts on streamflow, the DSE initiated this broadscale assessment of the short and long-term impacts on water yields from the recent fires.

3.1.6 Draft Gippsland Region Sustainable Water Strategy (DSE, 2010)

The Draft Gippsland Region Sustainable Water Strategy (SWS) was released for public comment on 6 September 2010. The Gippsland Region SWS is one of four sustainable water strategies that have been undertaken as part of the State Government’s commitments under the Our Water Our Future White Paper to plan for long-term water security across Victoria.



The Gippsland Region SWS aims to set out a long-term regional plan to secure water for local growth, while maintaining the balance of the area's water system and safeguarding the future of its rivers and other natural water sources.

The Gippsland Region SWS provides a stock-take of all the water resources available within the region, and outlines the planning and actions needed to respond to risks to ensure secure water supply for communities, business, industry and the environment into the future.

The Mitchell, Nicholson and Tambo River catchments are frequently referred to throughout the strategy document, which notes that there are no further year-round entitlements available within any of these river basins. The draft proposes additional winterfill entitlements capped at 6 GL for the Mitchell River and 1.5 GL for the Tambo River, which (if adopted in the final strategy) would be re-evaluated when the Strategy is reviewed in 7 to 10 years’ time. Where future demands exceed these caps, a change would only be reconsidered where (using the precautionary approach) there is shown to be a low risk to the reliability of existing consumptive users and the environment (DSE, 2010).

3.1.7 Water Resource Modelling for the Amendment of the Mitchell River Urban Bulk Entitlement (SKM, 2010)

To provide greater security of supply and increased operational flexibility, EGW proposed to cease the use of the Nicholson River dam, cancel its bulk entitlements from the Nicholson and Tambo Rivers and seek an amendment to divert an equivalent volume from the Mitchell River during the July to October winter-fill period. As part of this application, detailed modelling and analysis was undertaken to determine the effects on urban users, irrigators and the environment.

Water resource modelling was undertaken using the daily REALM model of the MRWSS, which was also used for the Gippsland Region SWS. The output of the scenario modelling was the basis for EGW”s successful application to transfer the Nicholson and Tambo bulk entitlements to the Mitchell River. This was confirmed in a letter from the Minister for Water on 29 September 2010 and gazetted on 7 October 2010.

3.1.8 Aquifer Storage and Recovery investigations (various, 2010)

EGW has undertaken trials to investigate the potential to utilise the five groundwater bores constructed in 2007 for Aquifer Storage and Recovery. Numerous reports have been completed as part of this investigation. These reports address areas including: groundwater modelling; monitoring of ASR trials; and risk assessments.

3.2 Regulations and Legislation Victoria’s water resources are governed by a number of regulations and legislation. Some key legislation concerning this WSDS are detailed as follows.

3.2.1 Surface Water Caps

Each Surface Water Management Area (SWMA) within Victoria is subject to a surface water cap. The Mitchell River off-take falls within the Mitchell River SWMA which was listed in 2005 as being slightly modified (http://www.water.gov.au/regionalwaterresourcesassessments/specificgeographicregion/tabbedreports.aspx?pid=vic_sw_224). The cap on this system was implemented in 2004 and during this time the sustainable yield was reported as being 126,294 ML per annum.

Any further development in terms of surface water can only be undertaken by trading water rights (via water savings achieved through improvements in distribution and water-use efficiency) or via use of alternative sources of water (e.g. recycled water).

The Draft Gippsland Region SWS includes a proposal to increase the temporary cap on new winterfill entitlements from the Mitchell River to 6 GL. This cap is in addition to EGW’s transfer of entitlement from the Nicholson and Tambo Rivers.

3.2.2 Streamflow Management Plans

Streamflow Management Plans (SMPs) aim to ensure that surface water is managed in a fair, reliable and equitable manner between both consumers and the environment. They define the rules for sharing water in unregulated rivers and streams and are only developed for priority streams where there are competing water users. There is currently no SMP in place for the Mitchell River, though an environmental flows study completed



as part of EGW’s Bulk Entitlement transfer (Alluvium, 2010) provides a basis for flow sharing between the environment and consumptive users.

3.2.3 Groundwater Caps

Groundwater management in Victoria is undertaken geographically through the identification of a series of areas called Groundwater Management Units (GMU’s). The groundwater management areas in the Mitchell River Water Supply System area can be seen in Figure 3 and Figure 4. The three different groundwater units are:

Water Supply Protection Area (WSPA) – these cover aquifers that have been identified as having potential value however do not yet require a Permissible Annual Volume (PAV) to be set. Each WSPA has a Groundwater Management Plan to ensure the ongoing protection of the resource.

Groundwater Management Area (GMA) – these cover aquifers with high use or potential for high use to ensure sustainable extraction. Each GMA has been assigned a cap known as ‘Permissible Annual Volume’ (PAV).

Unincorporated Areas (UA’s) – these cover aquifers where groundwater is expected to provide little potential due to low yields or poor water quality.

The flood plain of the Mitchell River between Bairnsdale and Woodglen, as well as much of the land to the south east as far as the coast, incorporates the Wy Yung WSPA for the shallow aquifer of depths less than 25 metres (Figure 3). The WSPA was declared in 2000, with a draft management plan prepared in 2004 which is yet to be finalised (http://groundwater.geomatic.com.au/Main.aspx).

Figure 3: Water Supply Protection Areas (http://gmu.geomatic.com.au/Default.aspx)

The Stratford GMA to the south east of Bairnsdale (Figure 4) applies to aquifer zones below 150m and 350m.



Figure 4: Groundwater Management Areas (http://gmu.geomatic.com.au/Default.aspx)

3.2.4 Victorian River Health Strategy

The Victorian River Health Strategy (VRHS) outlines the Government’s long-term policy for managing Victoria’s rivers. It includes a vision for Victorian river management, policy direction on river health issues and a blueprint to integrate all work on Victorian rivers to gain the best river health outcomes (Environment Victoria, 2009).

The VRHS lists the Mitchell River as being one of only two iconic river systems in Victoria. It is therefore a very high priority in terms of management. A second generation VRHS (to be entitled the Victorian Strategy for Healthy Rivers, Estuaries and Wetlands) is currently being prepared and is expected to be issued for public comment in late 2011 (pers. comm., DSE, 16 May 2011).

3.2.5 Victorian Strategy for Healthy Rivers, Estuaries and Wetlands (under development)

The Victorian Strategy for Healthy Rivers, Estuaries and Wetlands (VSHREW), which is currently under development, will in the future provide the framework for management of Victoria’s waterways. The VSHREW will also guide the development of integrated regional strategies and management plans underpinning the statewide approach to managing Victoria’s rivers, estuaries and wetlands.

The Strategy will provide:

a common vision, principles and approach for the management of rivers, estuaries and wetlands in Victoria a transparent, integrated planning framework that:

- sits within a whole of catchment management context - integrates the management of all waterway health activities on rivers, estuaries and wetlands - facilitates community-based decision-making - deals with the challenges of drought, extreme events and climate change

statewide targets for river, estuary and wetland condition new policy directions for waterway management actions that will deliver more effective and efficient management of rivers, estuaries and wetlands.

The draft strategy is currently under development and in a consultation phase for key stakeholders. It is expected to be released for public comment early next year, prior to completion by the end of 2012.



3.2.6 Regional River Health Strategy (2005 – 2010)

The East Gippsland Regional River Health Strategy (RRHS) is one of ten strategies developed across the State to implement key river health objectives outlined in the State Government White Paper ‘Our Water Our Future’ and the VRHS. The Mitchell River is listed as being of very high value due to its relatively high conservation value, the naturalness of its flow, its intactness and its size. The upper Mitchell River catchment is largely in excellent condition (56%) while the lower Mitchell catchment is predominantly in poor condition (62%). One of the key priorities set out in the RRHS is to protect and improve the Mitchell River. The Mitchell and Tambo Rivers were also identified as priority sites of action to reduce sediment inputs and urban and industrial nutrient inputs.

3.2.7 Heritage Rivers

The Heritage Rivers Act (HRA) identifies a number of Heritage River Areas within Victoria. The HRA prohibits some water-related activities in heritage river areas, including the construction of artificial barriers or structures that may impact on the natural passage of flow. The HRA also restricts and in some cases prohibits the diversion of water, some clearing practices, plantation establishments and domestic animal grazing.

The East Gippsland Catchment Management Authority states that:

“The Mitchell River is recognised as a Heritage River for a number of environmental and social values, particularly botanical values in the Mitchell gorge, Australian Grayling habitat, native fish diversity, the essentially natural conditions of the Mitchell River in the gorge, geological and geomorphological significance (particularly the silt jetties) scenic landscapes, canoeing and fishing opportunities”.

3.2.8 Legislation

A range of State and Federal legislation exists to ensure the long-term protection of the environment from potential impacts, including (for example) those associated with development, construction or resource extraction. Water supply augmentations, whether additional extraction from available water resources, or capital works to improve supply infrastructure, must therefore be undertaken in the context of this regulatory framework.

Some of the Legislation that should be considered in the development of any water supply solution includes:

Water Act 1989 Flora and Fauna Guarantee Act 1988 Environment Protection Act 1970 Planning and Environment Act 1987 Environment Effects Act 1978 National Parks Act 1975 Fisheries Act 1995 Wildlife Act 1975 Catchment and Land Protection Act 1994 Commonwealth Environment Protection and Biodiversity Conservation Act 1999



4.0 Water Demand This section of the report discusses current demand across the towns in the MRWSS and estimates the likely future demands based on predicted population and consumption trends.

4.1 Current Demand Table 12 and Figure 5 display EGW’s historical bulk water diversions and total water consumption for the MRWSS. Data is presented from 2002/03, when Lakes Entrance began receiving all its supply from the MRWSS. Prior to 20 November 2007 the small township of Nowa Nowa was supplied by diversions from Boggy Creek. The connection of Nowa Nowa to the MRWSS enabled EGW to improve the reliability and quality of water provided to the town. Data for bulk diversions from the Mitchell River was obtained from EGW’s bulk meter at the Glenaladale diversion.

Table 12: Bulk water diversions and total water consumption in the Mitchell River Water Supply System (source: EGW Annual Reports)

2002/ 03

2003/ 04

2004/ 05

2005/ 06

2006/ 07

2007/ 08

2008/ 09

2009/ 10

Bulk water diverted from the Mitchell River 5,425 4,960 4,830 4,380 3,460 4,730 4,490 4,800

Bulk water diverted from the Nicholson River 26.1 22.8 21.7 22.7 27.5 18.1 - -

Total Water Consumption 4,070 4,080 3,950 3,950 4,000 3,465 3,900 3,730

Figure 5: Historical annual water diversion and consumption in the Mitchell River Water Supply System

Table 13 below shows a more detailed breakdown of water consumption in the Mitchell System based on EGW customer billing data for the MRWSS.

0

1,000

2,000

3,000

4,000

5,000

6,000

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10

Tota

l wat

er d

iver

sion

and

con

sum

ptio

n (M

L/ye

ar)

Total Bulk Water Diversions

Total Water Consumption



Table 13: Customer billing data (source: EGW annual reporting of water consumption statistics)

2006/07 2007/08 2008/09 2009/10 Residential connections 15,654 16,238 16,554 16,930 Non-residential connections 2,173 2,206 2,249 2,274 Total connections 17,827 18,444 18,803 19,204 Residential water use (ML) 2,790 2,415 2,713 2,568 Per capita consumption^ (L/person/day) 204 169 187 173

Non-residential water use (ML) 1,220 1,050 1,190 1,162 Total water use (ML) 4,011 3,465 3,903 3,730

^Per capita consumption has been derived by dividing residential demand by the total number of residential connections and assuming 2.4 people per connection.

Total water consumption remained relatively stagnant from 2002/03 to 2006/07 at approximately 4,000ML/yr. Water restrictions that were implemented in December 2006 as a result of the drought and bushfire impacts were removed by August. Customers’ attitudes towards conserving water resources have persisted, resulting in lower consumption during 2007/08 (EGW, 2008). Consumption approached the historical average of 4,000ML/yr in 2008/09 but was again significantly lower in 2009/10. Per capita consumption has declined from 204 L/person/day in 2006/07 to 173 L/person/day in 2009/10.

The volume of water extracted each year from the Mitchell River has varied due to climatic conditions (drought) and the bushfire events of 2002/03 and 2006/07. Diversions declined significantly during the bushfires of 2006/07 as the system was forced to diversify, including use of groundwater, for an extended period due to bushfires impacting water quality in the Mitchell River. Although extractions increased to 4,800 ML/yr in 2009/10, this volume is still less than the extractions of 2003/04 (4,960ML).

This reduction in total demand has occurred despite an increase in the number of connections. Unlike other regions of Victoria, East Gippsland has not been subject to extended periods of severe water restrictions. The continued decline in household and business water consumption is attributed to regular publicity surrounding key water conservation messages and the implementation of effective water saving plans by businesses.

For the purposes of REALM modelling, the average of all non bushfire impacted years (4,700 ML/yr) was taken to represent base year (2010) demand. If wetter conditions return it is possible that household water consumption could experience a degree of “bounce back”, whereby consumption recovers to pre-drought levels. It is considered unlikely that household consumption would completely return to previous levels given the level of investment in water savings fixtures, rainwater tanks and the increased community awareness of water scarcity in a changing climate.

4.1.1 Spatial Demand

The MRWSS services a number of demand centres, including the major towns of Bairnsdale and Lakes Entrance, across an area that extends from Lindenow to Nowa Nowa and from Paynesville to Bruthen. Table 14 summarises the approximate proportion and volume of demand within the towns of the MRWSS. Table 14: Approximate annual demand by location

Town Proportion Annual Demand (ML) Bairnsdale 43% 1,601 Paynesville (including Eagle Point, Newlands Arm and Raymond Island) 15% 556

Lindenow & Lindenow South 2% 79

Bruthen & Sarsfield 4% 149

Metung 6% 222

Johnsonville, Swan Reach and Nicholson 5% 182

Lakes Entrance & Kalimna 25% 920



Town Proportion Annual Demand (ML) Nowa Nowa 1% 21

Total 100% 3,730 Note: An approximate indication of the relative contribution to total demand of each township within the system has been determined from an analysis of historical demand (including Earth Tech, 2006). Apportioning the relative percentage of demand for each centre to the 2009/10 total water use of 3,730 ML then provides an approximate estimate of water demand by town.

4.1.2 Seasonal Demand

Analysis of recent bulk water meter data (2006/07 to 2009/10) confirmed the monthly water consumption profile presented in the previous Mitchell River Supply System DRP (SKM, 2006). The current seasonal, restrictable and unrestrictable demands are presented in Table 15. The unrestrictable demand has been determined based upon the assumption made in the previous DRP that unrestrictable demand is equivalent to 85% of the average demand of the three months of the lowest water use (August, September and October). Unrestrictable demand includes in-house use, industrial demand and some losses.

Table 15: Monthly water demand

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total Monthly Demand (ML) 282 329 329 376 423 470 517 470 470 376 329 282 4,700

Percentage of Annual Demand 6% 7% 7% 8% 9% 10% 11% 10% 10% 8% 7% 6% 100%

Unrestrictable Demand (ML) 253 253 253 253 253 253 253 253 253 253 253 253 3,036

Restrictable Demand (ML) 29 76 76 123 170 217 264 217 217 123 76 29 1,617

4.1.3 Non-residential Water Use

The customer billing data summarised in Table 13 indicates that residential demand in 2009/10 represented approximately 70% of total annual water consumption in the MRWSS.

The 2007 WSDS (SKM, 2006) stated that “regions of relatively high industrial demand within the MRWSS include customers diverting off the Wy Yung to Sarsfield main, Nowa Nowa (sawmill), Sarsfield and Lindenow South (recreation reserve, golf club).”

Non-residential demand also incorporates the typical activities that are inherent in major population and tourist centres, including hospitals and nursing homes, golf courses and recreation facilities, motels and caravan parks. Irrigation and general farm use also contribute to non-residential water use in the MRWSS.

4.1.4 Major Water Users

A review of customer billing data for 2009/10 identifies 21 customers who consumed more than 5 ML in the financial year. Collectively, these users represented approximately 9% of total water consumption, or around one third of non-residential demand. Table 16 shows the relative consumption of non-residential customers in the MRWSS who consumed more than 5 ML during 2008/09. Table 16: High-volume water users in the Mitchell River water supply system (source: EGW customer billing data)

Customer Customer Type Water Use (ML) % of Total Demand 1 Non-residential 121 3.2% 2 Non-residential 53 1.4% 3 Non-residential 33 0.9% 4 Non-residential 19 0.5% 5 Non-residential 11 0.3% 6 Non-residential 9 0.2% 7 Non-residential 9 0.2% 8 Non-residential 8 0.2%



Customer Customer Type Water Use (ML) % of Total Demand 9 Non-residential 7.5 0.2% 10 Non-residential 7 0.2% 11 Non-residential 6.5 0.2% 12 Non-residential 6.5 0.2% 13 Non-residential 6 0.2% 14 Non-residential 6 0.2% 15 Non-residential 6 0.2% 16 Non-residential 6 0.2% 17 Non-residential 6 0.2% 18 Non-residential 6 0.2% 19 Non-residential 5 0.1% 20 Non-residential 5 0.1% 21 Non-residential 5 0.1%

Table 16 indicates that the five largest water consumers now collectively consume about 6.3% of total demand. However, it is also evident that EGW supply a wide diversity of large commercial and industrial water users with consumption relatively evenly distributed between them. As identified in the previous WSDS, this highlights that significant demand reductions in water consumption by major water users will involve working with many customers, rather than just a select few.

EGW has set itself a target of a 25% reduction in per capita demand by 2015 and 30% by 2020 relative to average usage in the 1990’s (SKM, 2007). Analysis of high-volume water users can assist EGW in targeting demand reduction programs by working with major customers to improve water use efficiency.

Since 2007, water users with an annual consumption of greater than 10 ML have been obliged (under EGW’s Permanent Water Savings Plan) to implement a Water Management Action Plan (waterMAP). The waterMAP sets out how major customers will use water more efficiently in the future and requires them to:

assess their water usage identify inefficiencies and opportunities for water savings prepare an action plan to implement water conservation activities annually report on the implementation of water conservation activities.

Table 16 indicates that EGW has at least five customers that should be adhering to waterMAPs as part of efforts to improve efficiency and reduce demand in the long-term.

4.1.5 Unaccounted Water

Total non-revenue water is calculated as the difference between bulk water diverted from the Mitchell River at Glenaladale and overall water consumption. Unaccounted water is non-revenue water less any accounted-for water not billed by EGW (such as process water or water used for mains flushing), and includes water lost through leakages or through pipe breaks, as well as any other water not calculated.

Unaccounted water for the previous eight years as determined by EGW is shown in Table 17.

Table 17: Summary of Unaccounted Water (source: EGW annual reporting of water consumption statistics)

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 Volume unaccounted for (ML)

1,385.2 650.15 560.9 302.1 251.3 375.0 314.4 437.7

Percentage of total volume diverted

25.4% 13.1% 11.6% 6.9% 7.2% 7.9% 7.0% 9.0%



Since 2004/05 unaccounted water has reduced and stabilised to between 7% and 9% of total water diversions. This is attributed to EGW’s active and ongoing water efficiency program, particularly efforts to isolate and target areas of high leakage within the system. EGW noted in their Annual Report an increase in Accounted Water not Billed during 2009/10 that was associated with the construction and commissioning of the new Woodglen storage.

Based on figures provided in EGW’s 2009/10 Annual Report, unaccounted water across the entire service area is calculated at 10.3%. The target set in EGW’s Water Plan is to reduce unaccounted water to 10% (average across all water supply systems). While unaccounted water in the MRWSS has been successfully reduced below EGW’s target since 2005/06, it is recommended that EGW continue to be vigilant in minimising unaccounted water by identifying leakages, regularly calibrating meters, and installing meters where consumption is uncertain. As EGW’s largest system, it is particularly important that unaccounted water in the MRWSS is maintained below the long-term target.

4.2 Forecast Water Demand Urban water demand for the MRWSS was modelled as part of the bulk entitlement transfer investigations (SKM, 2009). There are a variety of factors that can influence future demand which include: population growth, change in consumer behaviour, demographics, climate and the installation of water efficient appliances or rainwater tanks.

Historically, EGW has used population growth projections to forecast future demand. The recent fluctuation and general decline in per capita consumption indicates the extent to which behavioural change and responsiveness to external conditions, particularly climate, can influence demand. Each of the variables listed above contain a degree of uncertainty as to their impacts on future demand and combining the uncertainties of these variables creates a wide range of potential future demand scenarios. This reflects a key element of uncertainty in using population growth as a means of predicting future growth in water demand.

Future demand projections were developed during the Bulk Entitlement Transfer modelling (SKM, 2010) in conjunction with this strategy. Long term average extractions were used to represent current demand (4,700 ML/yr, see Section 4.1). To account for the uncertainty in future demand trends a scenario approach was adopted. Best, worst or intermediate demand scenarios were based on various population projections described below for which there is a high variability (see proceeding Sections). The intermediate demand scenario is considered to be the baseline scenario. For the purposes of estimating future water demand, it is assumed that commercial and industrial growth occurs at the same rate as residential growth.

4.2.1 Victoria in the Future

The previous WSDS (SKM, 2007) used population projections from Victoria in Future (VIF) (VIF, 2003) to project future demand. The most recent VIF projections have since been released and these show a substantial increase to the previous population projections. The most recent population projection for Bairnsdale predicts a 95% increase between 2006 and 2055 as opposed to the previous forecast of 25% for the same period.

The change in the VIF population projections emphasises the inherent uncertainty in predicting future population growth. In combination with potential fluctuations in per capita demand (as indicated in Section 4.1), there is considerable uncertainty associated with long-term estimation of future water demand. It is therefore important that actions proposed within this WSDS retain the flexibility to adapt to future growth scenarios as they eventuate.

The latest edition of Victoria in Future (VIF) population predictions were undertaken in 2008 and were released during 2009. The population predictions for the wider East Gippsland region are listed in Table 18. Table 18: Growth rates reported for East Gippsland (VIF, 2008)

Period 1996 - 2001 2001 - 2006 2006 - 2011 2011 - 2016 2016 - 2021 2021 - 2026 Annual growth 0.2% 1.0% 1.5% 1.4% 1.3% 1.2%

In addition to the local government scale projections, further estimates are made for smaller Statistical Local Areas (SLA’s). The four SLA’s within the East Gippsland region and their calculated growth rates are indicated in Table 19.



Table 19: SLA’s and reported growth rates (derived from VIF (2008) data)

SLA Total Growth (2006 – 2026)

Average Annual Growth Rate (2006 - 2026)

E. Gippsland (S) – Bairnsdale 38.16% 1.91% E. Gippsland (S) – Orbost 10.11% 0.51% E. Gippsland (S) – South-West 42.52% 2.13% E. Gippsland (S) – Balance 12.40% 0.62%

4.2.2 Census Data

Census data for the key towns within the MRWSS is listed in Table 20. The regions included within the Census have changed over time which makes comparison difficult.

Table 20: Census Population Data (ABS, 2009)

Census Year / Population

Town 1996 2001 2006 Bruthen 601 530 624 Eagle Point NA 393 408 Lake Tyers 369 517 550 Lakes Entrance 5248 5476 5548 Lindenow 236 302 338 Metung 508 519 726 Newlands Arm NA 393 429 Nowa Nowa 172 170 144 Paynesville 2661 2848 3458 Bairnsdale 10890 10557 11282 Lucknow NA NA Banksia Peninsula NA NA Raymond Island NA NA 350 Swan Reach NA NA 847 Sarsfield NA NA Nicholson NA NA 1504 Johnsonville NA NA 586 Total 20685 21705 26794

NA = Not Available

4.2.3 East Gippsland Shire Council Projections

Advice from EGSC suggests a recent average annual growth rate across the shire of around 1.7%, though areas growing at above this average rate include Paynesville (2.6%) and Bairnsdale (2%) (pers. comm., EGSC, 16 February 2011).

Planning and development applications also suggest sustained growth in the number of residential lots in Lakes Entrance, where recent growth is estimated at 2% (Urban Enterprise, 2010), EGSC expects growth in these three centres to continue at recent rates over the coming ten years.

4.2.4 Impacts of Demand Management and Climate Change

In addition to population growth, future demand estimates must also consider the impacts of demand management and climate change. DSE (2005) have previously advised that, as a ‘rule of thumb’ measure of customers’ response to climate change impacts, demands should be increased by 1% for every 6% reduction predicted in streamflow. This is based on the prior experience of Melbourne Water during periods of prolonged dry conditions and high temperature, and is premised on customers’ increased need for water in hotter conditions.



In contrast with the increase in demand predicted to occur as a result of the impacts of climate change, it is also assumed that demand will reduce by 6% by 2025 due to additional demand management (SKM, 2010).

4.2.5 Adopted Growth Scenarios

To account for the uncertainty in future demand trends a sensitivity analysis for future demand projections has been adopted. High, low and intermediate demand scenarios as described in the proceeding sections are shown in Figure 6.The substantial shift from previous VIF (2003) projections to current VIF (2008) projections underlines the need for a sensitivity analysis.

4.2.5.1 High Demand Scenario

The high demand scenario assumes that demand increases linearly with population growth at the rate projected by VIF (2008) to 2060. Although it is considered possible that this growth rate would slow into the future (as per VIF’s projections for greater regional Victoria), this could be offset by any bounce back in per capita consumption and is therefore considered a suitable worst case scenario for future planning.

The high growth scenario also aligns with EGSC’s present estimates of short to medium term population growth.

4.2.5.2 Low Demand Scenario

The low demand scenario is based on the method from the previous WSDS (SKM, 2007) which used VIF projections from 2003 (1.1% annual growth to 2025) and then a tailing off of growth to 0.8% beyond 2025 to 2060. This assumes no bounce back in per capita demand.

4.2.5.3 Intermediate Demand Scenario (Baseline)

The intermediate scenario is calculated as the median between the low and high demand projections, which is considered a valid representation of potential future growth. This scenario aligns with EGW’s current Corporate Plan, which incorporates growth in connections of 1.5%, and provides a rational baseline for comparison with the high and low scenarios. This figure also compares well with the latest projections from the Victorian Government, which indicate that Estimated Residential Population (ERP) in East Gippsland increased by 1.4% in 2009-10 (DPCD, 2011).

Figure 6: Projected demand scenarios for the MRWS

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2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

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5.0 Demand Management The 2007 WSDS detailed both current (at 2007) and future demand reduction initiatives for EGW’s service area. There have been no significant changes since then so the majority of this text has remained the same.

Sections 5.1.1 and 5.1.2 of this report are direct excerpts from the 2007 WSDS (SKM) with updates provided in italics.

5.1.1 Current Demand Reduction Initiatives (SKM, 2007)

EGW is currently undertaking measures which are expected to result in per capita demand reduction over time. EGW is part of the savewater!TM alliance through the Victorian Water Industry Association, which represents all of Victoria’s water authorities. Details of the savewater! TM initiative can be found at http://www.savewater.com.au. The site provides information on water conservation, runs competitions to win water conserving products and provides access to suppliers of water conserving products.

For estimating the effect of demand reduction initiatives, EGW relies upon the detailed demand information derived from Melbourne’s end-use model, which models property scale demand by considering the in-house and external water use of each property (WaterSmart, 2006a). It is acknowledged that there are some differences between consumer behaviour in Melbourne and East Gippsland, however given the high degree of uncertainty surrounding demand reduction forecasts, this adoption of technical information from Melbourne with justifiable adjustments is considered appropriate.

In recent years, water conservation efforts by the water utilities and the Victorian Government have targeted all major aspects of residential water use with an emphasis on education and behaviour change. A rebate scheme for water conservation products has been operating since January 2003.

For example, AAA shower roses attract a $10 rebate on the purchase price, whilst rainwater tanks with a connection to the toilet for flushing attract a $300 rebate. The most noteworthy regulatory changes affecting residential indoor water use have been:

The introduction of a mandatory water efficiency labelling for appliances (commencing 2006) under the national Water Efficiency Labelling and Standards Scheme (WELS);

The introduction of rising block tariffs, which result in higher charges for high water users; and The Five Star Home standards which require all new homes in Victoria to have water efficient showerheads,

tapware, a pressure reducing valve where mains pressure is over 50 m, and either a solar hot water heater or a rainwater tank connected to the toilet (or equivalent saving through a dual pipe system).

Outdoor water use has been targeted through the introduction of permanent water saving measures, which include the requirement for a trigger nozzle on hoses, restricted times for garden watering, no hosing of paved areas and notification to be given to EGW when filling a new pool. These State wide measures are expected to result in a 2% reduction in total demand (TWGWSA, 2005).

A per capita demand reduction of 22% has been achieved in Melbourne over the last decade, however some of this demand reduction is due to recent water restrictions and hence it is unclear whether all of this demand reduction will be maintained when restrictions are lifted (Watersmart, 2006b). This reduction includes water savings by industry, government and households. WaterSmart attributes this to water conservation programs, water pricing reform, water audits with major industrial water users, the five star building standard, permanent water saving measures, water saving garden centres, savewater.com alliance, leak control programs and the national water efficiency labelling scheme. Of these activities, EGW has only just introduced permanent water saving measures, well after they were introduced in Melbourne, which are expected to result in a 2% reduction in demand (TWGWSA, 2005). This is effective from 2005/06 onwards. EGW also has an active leakage detection program which has completed works in Dinner Plain, Orbost, Cann River, Metung, Paynesville & Eagle Point. These are areas where EGW believes that high rates of leakage may occur.

It could be argued that household disposable income, water authority revenue and access to information are lower in regional areas than in Melbourne, so the water savings due to other activities could be expected to lag those achieved in Melbourne. Quantifying this lag is difficult, hence it has been conservatively assumed that existing demand reduction measures will merely serve to maintain existing per capita demand, similar to what has been assumed in Melbourne, apart from the initial 2% reduction in demand due to the introduction of permanent water saving measures.



This assumption has been carried forward into this updated WSDS for the Mitchell River Water Supply System.

Estimating per capita demands in East Gippsland is problematic because of the difficulty in accurately assessing the population being serviced. The estimate of population from census information is only collected in winter and therefore significantly underestimates peak summer and Easter populations, which swell due to an influx of tourists to the region.

The above paragraph is written in the context of all of EGW’s supply systems, reflecting the seasonal fluctuations in population for coastal towns such as Lakes Entrance. The average daily per capita demand has been estimated based on customer billing data, recent census data and Victoria in Future population projections. From this information the average daily water use is 260L/day per person (based on data available for the period between the 06/07 financial year and present). This measure of average daily per capita demand is likely to be overestimated as it’s been determined based upon the permanent winter population (i.e. the census data was collected in August of 2006). Several of the towns within the MRWSS are subject to significant visitor numbers at this time of year which when taken into account will significantly reduce the per capita demand. By comparison, per capita consumption determined from the number of residential connections (with an assumed 2.4 residents per connection) averages 180 L/day per person over the same period.

Estimating a change in per capita demand is equally problematic without knowledge of changes in seasonally weighted populations. This is because a change in winter population does not necessarily translate directly into a linear change in summer population, which is affected by the state economy (influencing disposable income and therefore travel decisions), weather conditions and accommodation capacity.

5.1.2 Future Demand Reduction Initiatives (SKM, 2007)

EGW will actively pursue demand reduction in each supply system. EGW has set itself a demand reduction target in line with State Government targets set for other water corporations across Victoria of:

A 25% reduction in per capita demand by the year 2015 relative to 1990s average demand; and A 30% reduction in per capita demand by the year 2020 relative to 1990s average demand.

Assuming that the 22% reduction in per capita demand has already been achieved in East Gippsland, EGW would require a 3% reduction in per capita demand from its customers by the year 2015 and an 8% reduction in per capita demand by the year 2020 in order to reach this target. This includes the 2% reduction in demand due to the recent introduction of permanent water saving measures that is not likely to have been realised relative to the 2005/06 demand data used in this strategy.

A range of actions by EGW and the State Government will be required to meet these targets. It is anticipated that the majority of these actions would be driven by the State Government and Melbourne’s urban water utilities. Specific actions by EGW include the following:

EGW will continue to work with its major customers to reduce the water use of those major customers. EGW will continue its leak reduction program. EGW will continue to keep abreast of technological developments in water saving measures currently being

investigated by Melbourne’s urban water utilities through EGW’s membership of the Victorian Water Industry Association.

Specific actions by other organisations that could contribute to EGW’s customers achieving the demand reduction target are as follows, as outlined in the Central Region Sustainable Water Strategy:

The State Government will extend its existing water savings behavioural change program until 2015. – This program is still running

The State Government will by 2006/07 introduce on-the-spot fines for breaching water restrictions or the permanent water saving measures – This has been adopted

The State Government will reform the water component of the 5-star building standard to make it performance based. This is expected to be operational by 2009 – This has been adopted

The State Government will by 2010 seek the adoption of standards under the national Water Efficiency Labelling Scheme for water appliances to set mandatory minimum or higher than existing standards for



showerheads, washing machines, toilets and evaporative coolers – This has been adopted, under Section 35 and 36 of The Water Efficiency Labelling and Standards Act 2005

The State Government will consider the rollout of smart water meters showing real time water use after completion of a trial in south east Melbourne by December 2007 – Trials completed and smart water meters were provided to Melbourne’s top 200 industrial water users. During 2007 the Victorian Government advised that Smart Water meters will be rolled out to all customers using 10 million litres or more of water per year. The progress of this rollout is unknown.

The Water Smart Homes and Gardens Rebates scheme, currently funded by the Victorian Water Trust, will be extended for a further four years until June 2011. This scheme makes rebates available for water tanks, dual flush toilets, greywater systems and other water saving appliances and devices – Scheme is still active

The State Government will develop a web-based ready reckoner to assist home owners in choosing different water saving options for their home by 2007 – This action has been completed

The State Government will continue until 2009 the Sustainable Water Efficiency Program for schools. This involves an audit of indoor water use and a retrofit of fittings and appliances – This program is still running

The extent to which demand reduction targets are achievable in any given year will be influenced by the age profile of assets, particularly in small supply systems, of which EGW operates several. As assets such as pipelines approach the end of their useful life, they will leak or burst, increasing water losses.

Measuring the effectiveness of these actions against EGW’s target will be based on measuring the change in the per capita demand from the current 335 litres per capita per day to 325 litres per capita per day by 2015 and 310 litres per capita per day by 2020. These targets are based on an assumed seasonally weighted population of double the winter population. Meeting these targets also assumes that the seasonally weighted population increases in proportion to the increase in winter population for the period over which the targets have been set.



6.0 Water Supply

6.1 Risks and Uncertainties There are a number of factors which may impact on the future reliability of surface water in the MRWSS, including:

Reduction in the volume of surface water available for extraction due to climate change Impact of bushfires on the catchment hydrology Impact of logging on the catchment.

These issues are discussed in the following sections.

6.1.1 Impact of Climate Change

The greatest concern for the MRWSS relating to climate change is a significant reduction in the volume of surface water available for extraction from the Mitchell River. Two reports which formulate streamflow reduction due to the impacts of climate change are Future Runoff Projections (~2030) for South East Australia, by the South Eastern Australian Climate Initiative (SEACI, 2008), and Rainfall runoff modelling across the Murray-Darling Basin, by CSIRO (2008).

The CSIRO report states that:

“Almost all the catchments available for model calibration are in the higher runoff areas in the southern and eastern parts of the SEACI region. Runoff estimates are therefore generally good in the southern and eastern parts of the SEACI region but comparatively poor elsewhere.”

Neither of the study areas of the CSIRO or SEACI reports refer specifically to the towns of the MRWSS. However, in order to provide an approximation of the impact of climate change on the Mitchell River, the SEACI data was adopted since the study boundaries encapsulate the system, whereas the CSIRO report is restricted to the Murray-Darling Basin to the north.

Using the closest co-ordinates available from the SEACI data to the Mitchell River, the percentage change in modelled mean annual runoff for Bairnsdale (~2030 relative to 1990) is projected to be -10% for the median scenario and -25% for the dry scenario. Since the SEACI data does not extend beyond 2030, projections by Jones and Durack (CSIRO, 2005) were used to scale the SEACI projections to 2060 (SKM, 2010). Table 21: Projected reduction in streamflow in the Mitchell River resulting from climate change

Climate Change Scenario

Jones and Durack (2005) projections of reduction in streamflow, relative to 1990

SEACI projections of reduction in streamflow, relative to 1990

2030 2060 (Factor applied)1 2030 2060

Median/medium -10% -23% 2.3 -10% -22% Dry -16% -39% 2.44 -25% -61%

1 - The ratio between Jones and Durack 2060 and 2030 projections, used to factor SEACI projections to 2060 (SKM 2010)

The Draft Gippsland Region SWS (DSE, 2010) notes that the change in rainfall in Gippsland over the past 13 years has been significant, with reductions in annual average rainfall of between 10 and 23 percent. It also notes that a percentage decrease in runoff of two to three times the decrease in rainfall can be expected, as a result of increasing temperatures, drier soil conditions and changing rain patterns. Since 1997, streamflows in the Mitchell River have reduced by 38% from the pre-1997 long-term average (DSE, 2010).

The Draft Gippsland SWS considers a range of climate change scenarios but focuses on two: continuation of recent low-inflow (since 1997) conditions as a permanent step-change in climate; and a medium climate-change scenario based on predictions by CSIRO.

With regards to the impacts of climate change on water demand, the previous WSDS (SKM, 2007) stated that:

“Based on advice from the Department of Sustainability and Environment (2005), demands are expected to increase by around 1% by the year 2055 for every 6% reduction in streamflow”



This approach has again been adopted for this WSDS, resulting in demand increase of up to 10% by 2060 attributed to the impacts of climate change under a dry scenario.

6.1.2 Step Change Scenario

It is possible that the low flows that have been experienced since 1997 represent a permanent step change in climatic conditions. SEACI will be conducting research over the next three years to investigate the reasons for the recent dry conditions and to determine the suitability of the various global climate models for south eastern Australia.

Higher than average rainfall has been experienced throughout many parts of Australia in recent months, which is thought to be due to the impacts of a strong La Niña episode of the Southern Oscillation Index. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES 2010 – p7) summarised the impact of these events as follows:

“The current La Niña event is associated with warm conditions in the Indian Ocean and cool conditions in the equatorial Pacific Ocean, which are influencing the December 2010 to February 2011 rainfall and temperature outlook.

La Niña periods are usually, but not always, associated with above normal rainfall during the second half of the year across large parts of Australia, most notably eastern and northern regions. Night time temperatures are historically warmer than average and tropical cyclones occurrence for northern Australia is typically higher than normal during the cyclone season (November-April).”

Initial advice from DSE is that based on historical trends and climate change projections suggests that there is a strong chance that dry conditions could resume in 2011/12 once this La Nina episode has passed.

The conditions of the past 13 years have been more severe than those predicted under high climate change scenarios. It is therefore prudent to plan on a continuation of these conditions as a worst-case scenario against which to assess the reliability of the MRWSS. The Draft Gippsland Region SWS notes that average inflows in the Mitchell River since 1997 represent a reduction of approximately 38% from historical long-term average annual inflows (Figure 7).

Figure 7: Annual streamflows for the Mitchell River (source: Draft Gippsland Sustainable Water Strategy)

The Draft Gippsland Region SWS also notes a change in the seasonality of rainfall since 1997, with the summer low flow period extending well into autumn (as shown in Figure 8). Under continued low-flow conditions there is greater pressure on the river to meet the needs of both consumptive users and the environment. This has significant implications for reliability of supply, placing greater emphasis on the need for storage to capitalise on available winter flows.



The Mitchell River is a Heritage River and one of the last major unregulated rivers in Victoria. The Victorian Government and opposition both presently maintain a ‘no dams’ policy, so on-stream storage on the iconic Mitchell River is therefore not a feasible option in the foreseeable future. Off-stream storage to capture winter flows, including ASR where possible, will be an increasingly important component of the water supply system.

Figure 8: Average daily inflow in each month in the Mitchell River Basin, pre- and post-July 1997 (source: Draft Gippsland Region

Sustainable Water Strategy)

6.1.3 Impact of Bushfires

Bushfires in forested catchments have the potential to significantly impact runoff and therefore streamflows over time. Runoff initially increases in the first few years after a bushfire, before then declining as vegetation re-establishes and re-grows. The maximum reduction in runoff generally occurs approximately 10-30 years after the fire, before increasing back to pre-fire levels.

The Mitchell River catchment is predominately native forest, with the area subject to recent bushfires mostly comprised of mixed species of Eucalypt and Mountain Ash, with some small areas of grassland (no tree coverage) (SKM, 2009). The response of catchments to bushfires varies with different vegetation types. This relationship between stream runoff and recovery for different species is shown in Figure 9 (scaled for annual rainfall of 2000 mm/year).



Figure 9: Streamflow response associated with bushfire impacts on different species (SKM, 2009)

Major bushfires in eastern Victoria and southern NSW burnt up to 2.4 million hectares in the summers of 2002/03 and 2006/07, with 130,000 hectares impacted by both events. Large areas of the upper reaches of the Mitchell catchment (in the Dargo and Wongungurra River sub-catchments) were burnt during the 2003 alpine fires, with the 2006/07 fires impacting around 50% of the entire Mitchell catchment.

The recovery of the vegetation (and by association the impact on streamflow) is influenced by the severity of the fire, with more intense burns resulting in a much slower recovery, The 2006/07 fires were particularly severe, with approximately half of the area burnt in the Mitchell catchment subject to the category of highest intensity burn, which results in complete destruction of the vegetation. These areas will take longer to recover and therefore have a greater influence on runoff and streamflow over time.

The characteristics of the affected areas are summarised in Table 22. Table 22: Summary of characteristics for selected catchments impacted by 2003 and 2006/07 fires (SKM, 2009)

Catchment % of Forested Area1 % of area

burnt Fire Severity2 (% of Area)

<= 20 years >= 100 years 1 2 2002/03 fires Dargo 1 83 90 6 41 Wongungurra 1 85 62 5 32 Tambo 3 85 67 6 28 2006/07 fires Mitchell 3 88 55 26 9 Tambo 3 90 15 6 2 Notes: 1 Indicates pre-bushfire age of forested areas

2 A fire severity of ‘1’ is indicative of Forest Crown Burn (most severe); ‘2’ is a Forest Crown Scorch

Due to the significance of these fire events and their potential impact on long-term runoff and streamflow in the many catchments affected, the DSE commissioned a broad scale study into the short and long-term water yield impacts (SKM, 2009). The report identifies an immediate increase in runoff directly following the fires, before streamflow declines to a minimum approximately 20 to 25 years after the fire. As forest regrowth matures the impact on runoff reduces, until gradually re-aligning with the streamflow that would have been expected without the occurrence of the fires (Figure 10).



Figure 10: Change in streamflow in the fire-affected Mitchell catchment, relative to mean annual flow prior to the fire (SKM, 2009)

(Note that the fire and no-fire response represented in Figure 10 shows the change in streamflow relative to a point in time (2006), with the long-term change therefore positive due to the reduced water requirement as the forest ages. Without the occurrence of a bushfire (the no-fire response), this occurs more quickly than if the forest must otherwise regenerate following fire).

The impact of the 2003 and 2006/07 bushfires on river catchments within the area covered by the MRWSS is summarised in Table 23. This indicates that modelling reliability of supply in the Mitchell catchment needs to consider a potential maximum reduction in streamflow of 10% by 2025. Table 23: Estimates of maximum reduction in streamflow relative to pre-2003 bushfire conditions (SKM, 2009)

Catchment Mean Annual Flow (GL/yr) Year(s) burnt

Maximum reduction in streamflow

GL/yr % Mean Annual Flow Year

Mitchell 1,313 2003 & 2006/07 -125 -10% 2025 Tambo 425 2003 & 2006/07 -22 -5% 2017 Nicholson 51 2006/07 -6 -12% 2019

Following the 2006/07 bushfires the Mitchell River experienced elevated turbidity as sediment from bushfire affected areas was carried into the river during subsequent rainfall events. EGW temporarily installed portable emergency treatment plants at Woodglen Reservoir in order to maintain high quality drinking water supply. The towns in the MRWSS also experienced severe water restrictions when levels in Woodglen reservoir were drawn down due to the poor quality of the Mitchell River. Stage 4 restrictions imposed in March 2007 were reduced back to Stage 3 in June following the installation of the treatment equipment. By August, with groundwater also supplementing supplies, all water restrictions were removed.

Proposed Fuel Reduction

The DSE undertakes prescribed burning across Victoria as part of a fuel reduction program aimed at minimising the threat of bushfire. With so much of the Mitchell catchment burnt in recent bushfires, DSE’s Fire Operations Plan indicates that there is limited planned burning within the Mitchell catchment over the next three years, particularly in the upper reaches. Almost all prescribed burns will occur in the lower part of the catchment near Bairnsdale, where recent bushfire events had no direct impact on water supply.

In comparison to the ongoing impacts of the 2006/07 bushfires that burnt more than half of the Mitchell River catchment, any impacts from DSE’s fuel reduction burning are considered to be minor and have not been considered further in this WSDS.



6.1.4 Forestry

The Mitchell River catchment is heavily forested, and while logging has occurred selectively in the past the total area impacted has been relatively small. A greater proportion of the catchment is identified as within Forest Management Zones, with very limited pockets identified for logging and these predominantly in the lower part of the catchment.

The previous WSDS stated:

“Under regional forestry agreements, coops within the Mitchell River catchment are logged on a rotation basis. Provided that logging is dispersed across the catchment, the impact of logging at the Mitchell River offtake will be relatively small, even if local impacts immediately downstream of the coop are significant.”

The previous WSDS also identified that a 600 hectare plantation is located approximately 5km north of Glenaladale, but that at 0.2% of the total catchment area is not expected to have any significant impact on streamflow in the Mitchell River. However, given the proximity to the raw water offtake on the Mitchell River, an impact on water quality could be experienced if appropriate sediment management controls are not employed at the plantation.

Although logging can impact streamflow in a similar manner to bushfires by reducing runoff as forests re-establish, the impacts of logging are expected to be negligible in the Mitchell River catchment, particularly in comparison to the ongoing effects of recent bushfires. It is also noted that much of the upper catchment is within the Alpine National Park, which is protected from logging activity. Logging is administered by DSE within the State Forest that comprises much of the remainder of the catchment.

6.2 Future Reliability of Groundwater EGW has an application pending with SRW for a licence for an ASR scheme at the Woodglen borefield and therefore plans to commence injecting water from the Mitchell River (via the Woodglen storages) into the Latrobe Valley Group (LGV) of aquifers. The LGV is a confined aquifer approximately 30 to 95 metres below ground level.

6.2.1 Climate Change

The Draft Gippsland Region SWS (DSE, 2010) states that levels in the LVG aquifer have been declining since the 1970s. Although the scale and complexity of the aquifer make it difficult to identify the precise cause of the decline, it is expected to be a combination of offshore oil and gas extraction, ongoing irrigation, and reduced recharge as a result of lower-than-average rainfall. The long-term impacts of climate change are difficult to predict in aquifer systems that tend to have more complex interactions than surface waters, though a reduction in rainfall will ultimately lead to reduced recharge. Confined aquifers such as the LVG are likely to take a longer time to respond to such changes, due to the longer time it takes surface water to reach and recharge them.

EGW has proceeded with the ASR trial in response to an inability to secure a groundwater licence and the lack of available irrigation licences on the market. The ASR trial approval granted by SRW is conditional on extracting only what is injected, so that EGW is in fact not reducing the overall groundwater resource. The impacts of climate change on the LVG aquifer are therefore largely incidental to the operational plans of EGW.

6.2.2 Aquifer Reliability

EGW has an application pending with SRW for an ASR scheme of 500 ML/year, which effectively augments the existing Woodglen storages and reduces the need for construction of a more expensive off-stream reservoir. EGW is investigating the potential to expand the capacity of the ASR scheme to provide an even greater volume of storage.

Utilising the numerical groundwater model produced during the ASR trial, it has been determined that an ASR scheme of between 1.2 GL/year and 5 GL/year may be feasible and is worthy of further investigation as part of a staged scheme development (AGT, 2010). Modelling indicates that a rate of 1.2 GL/year is not attainable using the five existing bores of the Woodglen borefield without constructing additional bores and pressurising the injection flows.

Approval and implementation of the ASR scheme has involved an extensive process of investigation, including risk assessments in accordance with the Australian Guidelines for Water Recycling: Managed Aquifer Recharge (EPHC-NHMRC-NRMMC, 2008). This process involved an initial Entry Level Assessment to determine basic viability of the proposal, followed by relevant investigations to inform a Maximal and Residual Risk Assessment.



Given some of the uncertainties inherent in ASR, this process is also subject to constant review and updating as more information becomes available.

The guidelines identify 12 hazards that have been considered during the risk assessment process:

Pathogens Inorganic chemicals Salinity Nutrients Organic chemicals Turbidity / particulates Radionuclides Pressure, flow rates, volumes and water levels Contaminant migration through preferential flow paths Aquifer dissolution and stability Aquifer and groundwater dependent ecosystems Energy and greenhouse gases

The residual risks presently identified (United Water International, 2010) are not considered to be major barriers to scheme implementation, and EGW is preparing for the staged implementation of ASR in order to continue to inform the risk assessment and successfully utilise ASR as a component of the MRWSS.



7.0 Reliability of Supply

7.1 REALM Modelling A Resource Allocation Model (REALM) for the Mitchell System has been developed (SKM, 2008) and utilised for a number of studies in recent years. A number of scenarios have been developed to account for the uncertainty in projecting future water supply and demand for the MRWSS. The scenarios considered the following key parameters and the range of values described in Table 24. Table 24: Range of parameter values as inputs to scenarios modelled in REALM

Parameter Scenario value Climate Change (impact on streamflows, as discussed in Section 6.1.1)

Medium climate change (10% reduction at 2030; 22% at 2060) Step-change (continuation of post-1997 conditions; ~38% reduction) High climate change (25% reduction at 2030; 61% at 2060)

Bushfires (impact of historical bushfires on catchment runoff and streamflow, as discussed in Section 6.1.3)

Low impact (5% reduction in streamflow at 2025) Moderate impact (7.5% reduction in streamflow at 2025) High impact (10% reduction in streamflow at 2025)

Population Growth (and impact on future demand, as discussed in Section 4.2)

Low growth - 2003 ViF projections Intermediate growth – EGW projections High growth -2008 ViF projections

The scenarios modelled consider the combined impact on water supply-demand balance at three periods in time: the present; the year of greatest predicted impact from bushfires (2025); and at 2060. The resulting nine scenarios that were assessed are shown in Table 25, and the key assumptions observed as part of the modelling are detailed in the following section. Outcomes of the REALM modelling are discussed in Section 7.2 and 7.3. Table 25: REALM modelling scenarios (SKM, 2010)

Scenario Description Variable

Time Period Climate Change

Bushfire Impact Population

1 Current base case Present Medium Low N/A 2 Current worst case Present Post-1997 High N/A 3 Current intermediate case Present High Moderate N/A 4 Year 2025 worst case 2025 Post-1997 High ViF 2008 5 Year 2025 intermediate case 2025 High Moderate EGW 6 Year 2025 best case 2025 Medium Low ViF 2003 7 Year 2060 best case 2060 Medium Low ViF 2003 8 Year 2060 intermediate case 2060 Post-1997 Moderate ViF 2008 9 Year 2060 worst case 2060 High High ViF 2008

7.1.1 Key Assumptions

The key assumptions made during the update of the REALM model for the MRWSS include the following (SKM, 2010):

The historical climate and streamflow data series were a daily historical sequence running from July 1955 to December 2007 (adopted from SKM, 2008).

The current demand time series was based on fitting data covering the period from roughly 2002 to 2007. Excluding periods of restrictions, demands were reasonably stationary over this period.

Maximum bushfire impact is a reduction in streamflow of 10% at 2025. Low, moderate and high bushfire impacts were 50%, 75% and 100% of this predicted impact respectively.



Climate change impacts to 2030 were adopted from SEACI. Beyond 2030 (the limit of SEACI projections), climate change impacts were determined by scaling the projections of Jones and Durack (2005).

As per DSE guidelines, the impact of climate change on demand is represented by a 1% increase in demand for every 6% reduction predicted in streamflow.

7.2 Current Reliability of Supply Current reliability of supply is estimated to meet EGW’s LOS objectives in the best and intermediate case scenarios that were modelled in REALM. However, the worst case scenario would see EGW fail to meet LOS objectives with regards to the frequency of both mild and severe restrictions. A summary of current reliability of supply predicted for each of these scenarios is shown in Table 26. Table 26: Current reliability of supply (SKM, 2010)

Scenario Frequency of mild^ restrictions (X in 10 years) and annual reliability (%)

Frequency of severe^ restrictions (X in 10 years) and annual reliability (%)

EGW Target < 1 year in 10 (90%) < 1 year in 15 (93%) 1 – Current base case 1.1 years in 10 (89%) 0.8 years in 15 (94%) 2 – Current worst case 1.9 years in 10 (81%) 1.4 years in 15 (91%) 3 – Current intermediate case 1.1 years in 10 (89%) 1.1 years in 15 (92%) ^ Mild restrictions are identified as Stages 1 or 2; severe restrictions as Stages 3 or 4.

It is acknowledged that, within the uncertainty of the modelling results, the current intermediate and base case LOS is approximately within the targets set by EGW. This correlates with the experience of the past ten years, with severe restrictions having been implemented most recently in 2006 and 2007 as a direct consequence of the major bushfires that affected up to half of the Mitchell River catchment and had significant impacts on water quality and streamflows. At the start of the decade, between 2001 and 2003, voluntary restrictions were also put in place.

7.3 Future Reliability of Supply The REALM modelling of the scenarios summarised in Table 25 identified a shortfall in storage capacity within the MRWSS. Although EGW holds bulk entitlement to more than 9,200 ML/year from the Mitchell River to supply a present annual demand of 4,700 ML, future increase in storage capacity is required in order to maximise winterfill opportunities and continue to meet LOS objectives.

7.3.1 Short Term System Performance

REALM modelling indicates that, with current levels of available storage, EGW would be unable to meet LOS targets (due to the projected frequency of restrictions) by the end of the next Water Plan period (2018). Table 27 shows that annual reliability is below target by 2018 for each of the scenarios modelled. Table 27: Future reliability of supply

Scenario Frequency of mild restrictions (X in 10 years) and annual reliability (%) 2018 2025

EGW Target < 1 year in 10 (90%) < 1 year in 15 Base Case 1 in 6 years (83%) 1 in 5 years (80%) Intermediate Case 1 in 4 years (75%) 2 in 5 years (60%) Worst Case 1 in 2 years (50%) 2 in 3 years (33%)

Depending on the particular scenario considered, REALM modelling indicates that between 2000ML and 2,500ML of total storage will be required (or an increase of 500ML to 1,000ML)

The range of scenarios modelled represents a wide spectrum of potential future conditions (incorporating population growth, and impacts of climate change and bushfires). These conditions will be reassessed during



subsequent WSDS revisions, but adopting the intermediate scenario is considered a reasonable basis against which to frame the current capability of the system.

Under an intermediate scenario for climate change, bushfire impacts and demand, it is estimated that an additional 700 ML of storage is required by 2018 on top of ASR operations as currently proposed. Alternatively, an additional constant supply of approximately 5 ML/d that is independent of climatic conditions, such as desalination or recycled water, could provide a similar level of reliability.

Figure 11 displays the output of REALM modelling under the intermediate scenario at 2018. The REALM model uses available historical streamflow data to predict how the MRWSS system would perform under a range of conditions (incorporating the impacts of climate change and bushfire, as well as an increase in demand due to population growth). The chart presents the estimated storage levels over a historical period of approximately 50 years, with episodes of low flow in the Mitchell River resulting in drawdowns of varying severity (visible as inverted ‘spikes’). Water restrictions are triggered in stages as storage levels drop, with more severe restrictions imposed when levels continue to decline. The frequency of restrictions over the data period is therefore influenced by the total storage that is available to mitigate periods of low flow.

The trigger levels for Stage 1 and Stage 3 water restrictions are also shown in Figure 11, indicating the number of times over the data period that storage levels decline to such an extent that restrictions would be imposed. The chart shows the current total storage level of 1,500 ML, with multiple periods of drawdown that exceed the trigger for Stage 1 restrictions over the 50-year period to five (as many as 14 periods of restrictions are visible, with a corresponding frequency of approximately 1 in 4 years (see also Table 27). In order to meet LOS targets at 2018, it can be seen from the chart that the total volume of available bulk storage would need to be increased.

Modelling indicates that a total storage requirement of 2,200 ML would be required at 2018, or a current deficit of 700 ML (above the current available bulk storage of 1,500ML). REALM modelling of this scenario also included EGW’s pending 500 ML/year ASR licence, which was shown (under assumed operating conditions that included limited daily extraction rates) to contribute the equivalent of approximately 150ML of bulk storage (see also Section 7.3.2). The contribution that ASR can make to bulk storage will need to be investigated by EGW upon implementation, including further investigation to assess the feasibility of expanding beyond the pending licence volume of 500 ML/year.

7.3.2 Benefits of ASR as a bulk storage option for the Mitchell System

A key characteristic of the MRWSS is that it relies on sufficient storage capacity to meet seasonal demand. The majority of demand in the system occurs during the peak summer holiday period, which generally coincides with the most likely time for reduced flows in the Mitchell River. During winter, supply shortages are rarely experienced as flows in the river are typically above the threshold that requires EGW to reduce its diversions. EGW also benefits from additional entitlement at this time (via its winterfill bulk entitlement).

Due to these characteristics, the period over which demand exceeds supply in the MRWSS each year is limited to a few summer months. Any option that provides additional supply outside of this period therefore has limited benefit in deferring future upgrades to bulk storage.

ASR represents a low cost storage option, however the ability for it to augment the bulk supply system is dependant upon the rate at which stored water can be extracted from the aquifer and transferred to the Woodglen Reservoir during these peak shortage periods.

REALM modelling has indicated that, based on current demands, storage levels can drop from full to the trigger level for Stage 1 mandatory restrictions in approximately 50 days. At the extraction rate of 2.7ML/d indicated by investigations to date, this would enable ASR to initially provide approximately 135 ML of supply once storage levels first begin to decline. The present ASR extraction rate compares with daily unrestricted demand in January of approximately 16 ML/day. At this extraction rate, ASR could therefore delay the onset of restrictions by approximately 8 days at peak summer demands, during which time it can continue to provide supply. On this basis ASR yields a total supply of approximately 150 ML from the time when storage levels first begin to decline until the imposition of Stage 1 restrictions.

Beyond the onset of Stage 1 restrictions, Stage 2, 3 and 4 restriction trigger levels are set to provide one month’s (30 days) supply between each trigger level. At the present extraction rate of 2.7 ML/d, ASR could provide approximately an additional 80ML of supply in the time between each trigger level, delaying the onset of restrictions at each stage by a few days. Any remaining capacity within the pending 500 ML licence volume could then be utilised to supply demand beyond the implementation of Stage 4 restrictions.



Modelling also indicated that the Stage 1 LOS objective (mild restrictions in no more than 1 in 10 years) is more critical than the Stage 3 objective (severe restrictions in no more than 1 in 15 years) and therefore dictates bulk storage requirements for the system. Therefore, while ASR continues to provide supply beyond Stage 1 restrictions, this additional supply will not reduce the total volume of bulk storage required for EGW to meet its LOS objectives. The contribution of ASR to bulk storage is therefore limited to that made before the onset of Stage 1 restrictions, or an estimated 150 ML at current extraction rates. A more preferable operating scenario would see the scheme expanded in both extraction rate and total capacity in order to increase the contribution that ASR would make to reducing the frequency of mandatory restrictions, and helping the corporation to meet its LOS objectives.

Extraction rates are largely a function of aquifer characteristics and behaviour. EGW has undertaken a number of investigations to establish local conditions and model expected aquifer behaviour under a range of ASR scenarios. The extraction rates EGW can expect to achieve are presently restricted by the drawdown on the aquifer that is experienced by neighbouring groundwater users. EGW would therefore need to seek to negotiate the purchase of bores (and groundwater entitlements) within the zone of influence of the ASR scheme in order to enhance the potential daily extraction rates from current ASR infrastructure.

Expansion of ASR capacity is also expected to require construction of additional bores and injection under pressure, which investigations by EGW to date indicate could result in artesian conditions for nearby bores. Appropriate infrastructure would need to be installed at each impacted bore to accommodate such conditions.

Figure 11: REALM modelling of storage levels for 2018 Intermediate Scenario

7.3.3 Long Term System Performance

Beyond the timeframe of the short term planning horizon described in the preceding section, the deficit between demand and supply is predicted to further increase in the absence of any system augmentation. Under the worst case scenario modelled for 2060, increased demand and reduced streamflows in the Mitchell River would mean that increases in bulk storage cannot alone meet EGW‘s LOS targets for supply reliability. In this instance, EGW would be required to identity and implement additional sources of supply (potentially desalination), or implement significant demand management to complement any increases in bulk storage. Modelling of this worst case scenario indicates that any increase in storage beyond 2,500ML will have diminishing benefits and that an alternative supply of up to10ML/d would be required in addition to this volume of new storage.

0

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Stor

age

(ML)

Year

Storage Levels Stage 1 RestrictionsStage 3 Restrictions



Future WSDS revisions will track progress against the factors influencing this finding, particularly population growth and climate change impacts, and inform an adaptive management approach that ensures EGW maintains capacity to meet LOS over the longer term.



8.0 Assessment of Options The assessment of options to improve reliability of supply for the bulk water system involved the following multi step process:

Step 1 – Options Briefing Paper Step 2 – Options screening Step 3 – Optioneering report Step 4 – Assessment workshop Step 5 – Draft strategy (reviewed by key internal stakeholders) Step 6 – Final strategy (endorsed by EGW Technical Committee and Board)

Each of these steps is discussed further in the following Sections.

8.1 Options Briefing Paper An Options Briefing Paper was developed with input from key internal stakeholders. The finalised Briefing Paper is attached in Appendix B. Table 28 contains a long list of all options considered in the Briefing Paper. Table 28: List of options considered

Solution Type Option Additional entitlements Surface water –additional entitlements

Groundwater – additional entitlements Demand management Demand management Surface water diversion and storage Increasing diversion capacity

Additional raw water storage at Woodglen Line and cover Wy Yung or Sarsfield reservoirs Line and cover Toorloo reservoir Toorloo Water Treatment Plant Groundwater – ASR

Alternative supplies Recycled water Stormwater harvesting Rainwater tanks Desalination of brackish groundwater Desalination of seawater

Innovative options Desalination barge Green City Direct Potable Reuse Regional Water Grid Power Stations Flexible Corporate Water Licence

Other Water cartage Reducing Level of Service

8.2 Options screening Options screening was completed by identifying any options considered to have fatal flaws for either economic, social, environmental, technical or political reasons. These options were screened out from further assessment leaving a short list of options to be evaluated in more detail.



Table 29: Options screened out due to fatal flaws

Solution type Option identified Reason for not taking forward Additional entitlements Surface water – additional

entitlements Politically and socially untenable while EGW has sufficient existing allocations.

Groundwater – additional entitlements

Politically and socially untenable to seek additional entitlements (currently fully allocated).

Surface water diversion and storage

Increased diversion capacity Modelling indicates there is no demonstrable benefit.


Retention times would exceed EGW’s target and unreasonably jeopardise water quality. Line and cover Toorloo Reservoir

Alternative water supplies Rainwater Considered technically flawed since security of supply not provided during dry periods.

Innovative Options Desalination barge Only consider further if desalination is to be included in EGW’s future water supply portfolio.

Green City Future option. Raise with Council to determine support.

Direct Potable Reuse Not part of current government policy. Review in future WSDS updates.

Regional Water Grid This option is not recommended as the benefit to cost ratio is likely to be low.

Transfer entitlements from La Trobe Valley power stations

Given the uncertainty associated with this option it is not recommended at this point in time.

Flexible Corporate Water Licence Future option. EGW to initiate discussions with the relevant agencies to determine whether or not this option is likely to be viable.

Other Reduced Level of Service EGW to assess during Water Plan 3 development.

Water cartage Infeasible at the scale of the MRWSS.

8.3 Optioneering Report An Optioneering Report was completed for shortlisted options (see Table 30) using EGW’s multi criteria assessment (MCA) framework, which was developed to assess all projects being considered for inclusion in the next Water Plan (2013 – 2018). MCAs are commonly adopted to provide an approach to options assessment that includes consideration of social and environmental factors as well as economic measures. Table 30: Short listed options


Surface water storage

Additional raw water storage (Woodglen 3) Toorloo Water Treatment Plant (WTP) to enable use of Toorloo Reservoir for bulk storage Aquifer Storage and Recovery (ASR)

Demand management Demand management

Alternative water supplies Recycled water Stormwater



Solution type Option identified Seawater desalination Desalination of brackish groundwater

The evaluation criteria shown in Table 31 and the weightings shown in Table 32 were developed by EGW during the development of Water Plan 3 (2013-2018). A copy of the Optioneering Report is included in Appendix C. Table 31: Criteria adopted for MCA

Selection Criteria Sub criteria

Socially Acceptable

Level of service

Customer expectations

Growth

Fit for purpose

Legal compliance

Social

Emergency response

OH&S

Technologically Achievable

Operability

Maintainability

Staff

Adaptability

Industry trends

Innovation

Constructability

Best practice

Technology

Efficiency

Locality

Standardisation

Changeability

Sustainable

Multiple Benefits/Objectives

Environmentally Responsible

Releases to air

Releases to water

Land quality

Use of raw materials and natural resources

Local/community environmental issues

Use of energy

Nuisance (visual, odour, noise)

Waste and by products

Transport

Politically Tenable Political



Table 32: Evaluation Criteria

Attribute Weighting

Economically Viable 40%

Socially Acceptable 20%

Technologically Achievable 20%

Environmentally Responsible 10%

Politically Tenable 10%

Total 100%

8.4 Assessment workshop An assessment workshop was held with internal stakeholders to discuss the results of the modelling and options assessment to date and to determine a preferred strategy.

The ‘do nothing’ scenario was excluded from the final MCA ranking process, on the basis that it would represent a failure on EGW’s part to adequately plan to meet its LOS obligations. While it is possible for EGW and its customers to agree on a lower LOS, this requires consultation with the community, which EGW undertakes during the preparation of its Water Plan.

Due to the high degree of uncertainty surrounding some of the costs and the potential for external funding for some options, a number of costing scenarios have been assessed as a sensitivity analysis of the final rankings. Three scenarios were assessed:

1) Baseline assessment: all costs as estimated, with demand management given a cost equal to the Woodglen storage option;

2) Demand management, recycled water and stormwater given the mean cost of all options, to reflect the possibility of external funding reducing the deficit between their full cost and the cost of an optimal alternative;

3) Demand management, recycled water and stormwater were prescribed the value of Woodglen as the preferred supply option, to reflect the possibility of external funding making up the full deficit between their full cost and the cost of an optimal alternative.

The results of the MCA were adjusted following the outcomes of the workshop and are shown in Table 33 below. Table 33: Multi Criteria Assessment Results


Rank Scenario 1 Score Scenario 2 Score Scenario 3 Score 1 ASR 4.19 ASR 4.22 ASR 4.19 2 Woodglen 3 3.55 Woodglen 3 3.69 Woodglen 3 3.54 3 Demand Management 3.19 Stormwater 3.02 Stormwater 3.30 4 Toorloo WTP 2.75 Toorloo WTP 2.93 Demand Management 3.18 5 Recycled Water 2.63 Demand Management 2.89 Recycled Water 3.13 6 Stormwater 2.60 Recycled Water 2.84 Toorloo WTP 2.73

7 Brackish Groundwater Desalination 2.35 Brackish Groundwater

Desalination 2.56 Brackish Groundwater Desalination 2.33

8 Seawater Desalination 2.28 Seawater Desalination 2.53 Seawater Desalination 2.25



8.5 Strategy An adaptive management approach is proposed to address the considerable uncertainty associated with reliability of supply in the MRWSS. The adaptive management approach addresses the immediate and short-term requirements of the system with the flexibility to respond to revised projections in the future.

To achieve this, a hierarchy of options has been developed (see Section 8.5.1) which forms the basis for the short term and long term strategies described in this section. The short term strategy focuses on recommendations for EGW to carry out immediately through to the completion of the next Water Plan period in 2018. The long term strategy informs the recommendations of the short term strategy and provides a vision for the future to guide future system augmentations.

Regular review of these strategies (every 5 years) will reassess key variables and their impact on augmentation triggers. It will also facilitate review of the assessment framework to ensure that the hierarchy of options evolves in accordance with EGW corporate strategies and Government policy.

8.5.1 Hierarchy of Options

From the outcomes of the assessment process, the following Hierarchy of Options was developed as a basis for the short term and long term strategies presented in Sections 8.5.2 and 8.5.3.

1) ASR – to the fullest extent that avoids environmental or social impacts 2) Woodglen raw water storage – to the extent that site constraints permit 3) Stormwater - pending sufficient external funding 4) Demand Management - where cost effective 5) Recycled water - pending sufficient external funding 6) Desalination - either brackish groundwater or seawater

8.5.2 Short term strategy

In the short term to 2018, REALM modelling indicates that EGW would need to construct the equivalent of an additional 700ML of additional bulk storage to meet its LOS objectives. The expansion of ASR would further reduce the volume of bulk storage that is required and EGW should therefore seek to expand ASR capacity to optimise this contribution. Any remaining deficit in storage would need to be constructed at Woodglen. It is recommended that EGW should: Table 34 Short Term Recommendations



Implement ASR (to the maximum extent possible) Investigate expansion of this scheme in beyond the current extraction limitations and capacity (ie. the pending licence for 500 ML/year)










EGW will need to investigate and determine the viable capacity of ASR within the early stages of the approaching Water Plan period (2013 to 2018). As discussed in Section 7.3, it is projected that LOS will fall significantly below targets before 2018 with current levels of available storage. EGW therefore need to act within the Water Plan period to implement additional bulk storage.

If it is assumed that a period of two years is needed to plan, design, construct and commission additional storage at Woodglen, the volume of storage that is required must be determined well in advance of its implementation. It is considered that EGW should aim to determine the viable capacity of ASR by the end of 2012. This will enable EGW to construct any remaining deficit in bulk storage by 2014.

To facilitate these potential works, EGW should allocate sufficient budget in the Water Plan for improvements to reliability of supply for the MRWSS. $15 million would represent a conservative approach that would enable the investigation of ASR and then allow sufficient budget to construct additional bulk storage at Woodglen in the event that expansion of the scheme is not possible.

8.5.3 Long term strategy

In the longer term to 2060, in order of priority, EGW would need to:

1) Continue to pursue ASR to reduce the volume of bulk storage or alternative water supply (desalination) required.

2) To the extent that ASR cannot be expanded to meet EGW’s target LOS objectives, additional bulk raw water storage should be constructed at Woodglen (pending the investigation of suitable sites).

3) To facilitate diverse and sustainable supply EGW should continue to pursue demand management, recycled water and stormwater harvesting schemes where cost effective and as technology and external funding permits.

4) Implement desalination (up to 10ML/d capacity) as a final resort once all other viable alternative sources have been fully allocated, in order to meet the remaining deficit in supply.

8.6 Indicative Costs The following costs are high level estimates only (+50%/-30%) and should be confirmed during conceptual design for construction projects or at the proposal stage of planning studies. Table 35: Indicative Costs

Project Cost Master Plan Allow $200,000 ASR Establishing ASR will incur additional operating costs

of between $100,000 and $150,000 per year, reducing over time to approximately $50,000 for proposed 500 ML/year scheme Allow $200,000 to undertake additional investigations to determine viability of expanding ASR to meet additional storage requirements



Demand management and leakage reduction Dependant on extent of implementation Investigate recycled water and stormwater Allow $500,000 for initial desktop studies and funding

applications Complete initial desktop assessment of feasibility of desalination

Allow $50,000



9.0 Conclusions and Recommendations A range of supply and demand scenarios has been modelled to assess EGW’s capacity to continue to meet LOS objectives within the MRWSS into the future. Under an intermediate scenario of population growth and impacts from climate change and bushfire, modelling indicates that EGW may not achieve its objectives with regard to the frequency of water restrictions. In the short term to 2018, to meet its LOS objectives EGW would need to construct the equivalent of an additional 700ML of additional bulk storage. Alternatively, an additional constant supply of approximately 5 ML/d would provide similar reliability.

It is recommended that EGW should: Table 36: Recommendations



Implement ASR (to the maximum extent possible) Investigate expansion of this scheme in beyond the current extraction limitations and capacity (ie. the pending licence for 500 ML/year)








A long term strategy has also been developed that will facilitate an adaptive management approach. The above recommendations will assist EGW in preparing future WSDS revisions, as well as the implementation of the hierarchy of actions identified in the long term strategy to meet LOS objectives to 2060.



10.0 References AECOM (2009), Mitchell River Water Quality Improvements Toorloo Reservoir Options – Peer Review, April 2009

AGT (2010a), Groundwater Model for Woodglen ASR Feasibility Assessment, September 2010

AGT (2010b), Woodglen ASR Trial Monitoring Data Review, September 2010

AGT (2010c), Groundwater Model for Woodglen ASR Feasibility Assessment – Scenarios: 1.2 GL/year, 5 GL/year & 15 GL/year, September 2010

Alluvium (2010), Minimising the environmental impact of water extraction from the lower Mitchell River, Final Report, February 2010

ABS (2009), 2006 QuickStats: Bairnsdale (Urban Centre/Locality), downloaded 17 December 2009 from http://www.censusdata.abs.gov.au/ABSNavigation/prenav/ProductSelect?newproductt

DPCD (2011), Victorian Population Bulletin 2011, Spatial Analysis and Research, Department of Planning and Community Development, April 2011.

DSE (2010), Draft Gippsland Region Sustainable Water Strategy, August 2010

DSE (2005), Guidelines for the Development of a Water Supply Demand Strategy, July 2005

Earth Tech (2003), Mitchell River Water Supply System – Bulk Delivery & Water Quality Improvement, November 2003

Earth Tech (2006), Mitchell River Water Quality Improvements: Preferred Option Detailed Analysis July 2006 Status Report, July 2006

(Environment Victoria, 2009). http://www.envict.org.au/inform.php?menu=7&submenu=220&item=668

(EGCMA, 2009). http://www.egcma.com.au/inform.php?a=5&b=45&c=170

East Gippsland Water, Annual Report 2007/08

East Gippsland Water, Annual Report 2009/10

GHD (2009), Report for Nicholson River Dam Decommissioning – Options Assessment, December 2009

Jones, R. N. and Durack, P. J. (2005) Estimating the Impacts of Climate Change on Victoria’s Runoff using a Hydrological Sensitivity Model, CSIRO Marine and Atmospheric Research, Melbourne, 46 pp.

SKM (2010a), Mitchell Scenario Modelling Results, February 2010

SKM (2010b), Water Resource Modelling for the Amendment of the Mitchell River Urban Bulk Entitlement, Report prepared for DSE and East Gippsland Water, October 2010

SKM (2010), Mitchell River Off-Stream Storage Investigation – Draft Report. Letter to EGW from SKM, 26 October 2010.

SKM (2008), Mitchell River REALM Update, Sinclair Knight Merz for Department of Sustainability and Environment.

SKM (2006), Drought Response Plan – Mitchell River Supply System, June 2006

SKM (2007), Water Supply Demand Strategy for East Gippsland Water, May 2007

South Eastern Australian Climate Initiative (2008), Future Runoff Projections (~2030) for South East Australia

Southern Rural Water (2009), Local Management Rules - Mitchell River

United Water (2010), Mitchell River – Updated Operational Risk Assessment of Proposed Aquifer Storage and Recovery Project (Draft Report), September 2010

Urban Enterprise (2010), Lakes Entrance Residential Supply and Demand Assessment, for East Gippsland Shire Council, March 2010.


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Appendix A

MRWSS Schematic

Lindenow

Glenaladale

WPS

Bore Field

(5 bores)

Lindenow

WPS

Lindenow Storage

13ML

TWL: 83.2m AD

Lindenow South

Tank

91kL

TWL: 60m AD

Lindenow

South

Lindenow South

WPS

Wy Yung Storage

88ML TWL: 56.1m AD

Bairnsdale

Aerodrome

WPS

Aerodrome

Elevated

Tank

0.1ML

TWL: 68m AD

Aerodrome

Wy Yung

Rural

Wy Yung

Urban

Wy Yung

Urban WPS (VSD)

Wy Yung

Rural

WPS (VSD)

Balfours

Road

Howitt Avenue

WPS (VSD)

BruthenBruthen

High Level

Bruthen Tank

0.3ML

TWL: 92m AD

Bruthen High

Level

WPS (VSD)

Eleven Mile

Road Tank

0.2ML

TWL: 134.8m AD

NicholsonJohnsonville

Swan

Reach

Metung

Metung Tank

4.5ML

TWL: 59m AD

Metung

WPS (VSD)

Kalimna

High Level

Kalimna

Elevated Tank

1.0ML

TWL: 84.7m AD

Kalimna High

Level WPS

Capes

Road

Merrangbaur Storage

4.5ML

TWL: 59m AD

Merrangbaur

WPS (VSD)

Thorpes Lane

High Level

Lake Tyers

Beach

LEGEND

Tank

Storage Pump

Kalimna Supply Zone

West

Bairnsdale

Sarsfield

Newlands

ArmBanksia

Peninsula

Raymond

Island

Eagle Point

Lakes

Entrance

Cunninghame

Hill

Paynesville

Lindenow South

Elevated Tank

68kL

TWL: 86.5m AD

Treatment

Plant

(20ML/day)

Nowa Nowa

Lakes

Entrance –

Nowa Nowa

Transfer WPS

Nowa Nowa

Tank

0.45ML

TWL: 113.1m AD

VSD Variable

Speed Drive

PRV Pressure Reducing

(PSV) (Sustaining) Valve

PRVPRV

Whiters

Street

WPS (VSD)

Mill Point

Alternative Supply

Eagle Point Tanks No.1 & 2

2 x 6.0ML

TWL: 34.8m AD

PSV

Actuated

Valve

Gravity fill line

Wy Yung –

Sarsfield

Transfer WPS

(VSD)

PRV

CWS

1.4ML

TWL: 82.0m AD

No.1 850ML

TWL: 92m ADNo.2 713ML

TWL: 92m AD

Woodglen Storages(# Series Op. 1 2 only)

#

Metung

Low Level

PRV

Bairnsdale West

WPS (VSD)(seasonal)

Note: Bairnsdale emergency

supply system not shown

Note: 21 No. pump stations in system,

excluding bore pumps

Cl2 booster location

(active)

Eagle Point

WPS (VSD)

Sunlakes Storage

48ML

TWL: 66.0m AD(tank bypass

decommissioned)

Bennetts Brook WPS

Aquifer Storage &

Recovery (ASR)(for storage

bypass only)

PRV

3 September 2010

Paynesville

Road Booster

WPS (VSD)

CO

addition

point

2

Cl2 booster location

(inactive)

MITCHELL RIVER

WATER SUPPLY SYSTEMSchematic (Not to Scale)

TRIM DOC/10/21916

Cunninghame Hill

Booster WPS

Sarsfield Tank

6ML

TWL: 109.5m AD

Mitchell River

Water Level:

33.7m AD


C:\Users\wallners\Documents\2Work\EGW\Final Draft_MRWSS Water Supply Demand Strategy.docx Revision E - 10 August 2011 B

Appendix B

Options Briefing Paper

http://vpo.au.aecomnet.com/projects/VSAB09883/8IssuedDocs/8.1 Reports/Final Approved Reports/Mitchell/Final/Appendices/Appendix B - Options Briefing Paper No. 2 v6.doc Revision B - 18 May 2011 1

Mitchell WSDS – Options Briefing Paper No. 2

Prepared by S. Wallner and N. Clarke

1.0 Purpose of Paper and Instructions This Briefing Paper has been prepared as part of the update to the Water Supply Demand Strategy for the Mitchell Water Supply System (MRWSS). It follows a previous Briefing Paper (22 November 2010) intended to engage internal stakeholders from both EGW and AECOM to consider and assess a long list of options to improve the reliability of bulk water supply for the MRWSS. This second Briefing Paper summarises the results of the options assessment so far, and is provided to inform a workshop to be held in Bairnsdale on January 20 to further assess short-listed options.

The information previously presented has been retained in this Paper to describe the options considered to date. The responses received for each option are summarised and the reasons each option was either selected for further assessment, or dismissed following the initial review, are explained.

A key piece of feedback from the initial paper was to seek out some more lateral or innovative options. In response an additional section has been added to the paper, entitled “Innovative Options”. At this time, these options have not been considered for more detailed options assessment (see below), and instead will be discussed broadly at the assessment workshop to gauge the level of interest in pursuing the options further.

An accompanying document contains a detailed assessment of remaining short-listed options and this Briefing Paper No. 2 should therefore be read in conjunction with “Issues Optioneering Report (IOR) of additional bulk storage and supply options for the Mitchell River Water Supply System (MRWSS)”.

Options considered feasible have, where appropriate, been modelled in REALM to determine their impact on reliability of supply, and net present unit costs have been developed for comparison purposes. The IOR incorporates a Multi Criteria Assessment (MCA) of short-listed options to evaluate their financial, economic, social, environmental, technological and operational considerations. This assessment framework is currently being used to assess projects for the upcoming Water Plan 3.

Options that perform best through this process have been incorporated into a provisional supply portfolio of short and long term options, from which EGW can choose to implement as the need arises. The outcomes of the MCA and the preferred supply portfolio are to be presented at the workshop in Bairnsdale to be tested by key stakeholders from both organisations.

2.0 Need for Supply Enhancement The previous Water Supply Demand Strategy (WSDS) for the system concluded in 2007 that there was adequate supply and infrastructure to meet Level of Service obligations within a 50 year horizon. However, this was premised on a number of key assumptions:

provision of a groundwater allocation of 2,500 ML/year (which has not eventuated)

climate change predictions (Jones and Durack) that have subsequently been revised

some consideration of bushfire impacts, though at a lower extent than that subsequently modelled for DSE

population projections from 2003 Victoria in Future (based on the 2001 census), which were increased significantly in the 2008 revision (following the 2006 census)

a total system live bulk storage volume of 1,818 ML

streamflow records at the time did not include the significant low flow event of 2006/07

Water Supply Demand Strategy East Gippsland Water 18 May 2011


a 993ML bulk entitlement retained on the Nicholson River for access as an emergency response measure.

Although these assumptions were correct at the time, changing conditions and evolving science has led inevitably to the need to revise these assumptions for the current WSDS, which includes:

climate change projections (from SEACI) currently recognised within the industry as the most applicable, which predict a more severe impact on streamflows in the future


population projections from 2008 Victoria in Future

streamflow records including recent low flows (2006/07)

a live bulk storage volume of 1506 ML.

transfer of bulk entitlements from the Nicholson and Tambo Rivers to the Mitchell River entirely under Winterfill conditions.

REALM modelling of the revised conditions in the Mitchell System now indicates that EGW will need to augment current infrastructure in order to meet Level of Service targets within the MRWSS into the future. By 2018 (the conclusion of the next Water Plan period), it is anticipated that between 2000ML and 2,500ML of total storage will be required (or an additional 500ML to 1,000ML at Woodglen). Under the intermediate scenario for climate change, bushfire impacts and demand, it is estimated that an additional 700 ML of storage is required by 2018 in addition to EGW’s proposed ASR operations. Alternatively an additional constant supply of approximately 5 ML/d that is independent of climate (such as desalination or recycled water) could provide a similar level of reliability.

This reversal from the findings of the previous WSDS is due to the combined impacts from changes in key inputs and assumptions, particularly:

reduction in available storage resulting from EGW’s Water Quality Improvement Program

a greater impact from climate change than previously projected

population projections twice those of previous estimates

more severe impacts on streamflow predicted from recent bushfires

transfer of bulk entitlements from the Nicholson and Tambo Rivers to the Mitchell River entirely under Winterfill conditions.

It is evident that climate change and population projections, in particular, not only influence results significantly, but are also attributed the greatest uncertainty. This therefore reflects the importance for EGW to adopt a flexible strategy capable of both addressing immediate and short-term requirements, as well as having the capacity to be readily updated and adjusted in response to revised projections in the future.

3.0 Options

3.1 Additional Surface Water Supply 3.1.1 Bulk Entitlements

EGW has recently sought successfully to transfer its Bulk Entitlements for water from the Nicholson and Tambo Rivers as an additional BE for winterfill from the Mitchell River. This was driven by environmental and water quality issues associated with the former two sources.


The Draft Gippsland Region Sustainable Water Strategy (SWS) proposes that no further entitlements are available for the Mitchell River during drier months, with a cap of 6 GL proposed on new winterfill entitlements (DSE, 2010). The SWS also proposes that no further entitlements will be issued for the Nicholson River at all, with winterfill entitlements limited to 1.5 GL for the Tambo River.

At present, EGW’s entitlement of more than 9,000 ML/year is sufficient to supply annual demand provided there is sufficient storage to capture winter flows. Under scenarios of high population growth, demand is anticipated to outstrip supply by 2060 at which time EGW could seek to obtain an additional winterfill entitlement within this cap, however given the uncertainty associated with population projections and therefore demand estimates, it is recommended that the need for additional winterfill entitlement should be reviewed in subsequent WSDSs.

To supplement its existing entitlement during months outside the winterfill period, EGW could seek to transfer or purchase existing licences to provide an additional diversion allocation. There are a large number of consumptive users along the Mitchell River, with around 90 licences held for direct pumping of more than 10,000 ML/year.

In the short term this would provide little benefit as a complex water sharing roster in place for diverters includes ten stages of restrictions, which commence once flows drop below 185 ML/d in the Mitchell River at Glenaladale. At present, EGW is able to divert up to 16 ML/d (approximately equivalent to peak demand) during periods of low flow, as long as a passing flow of 30 ML/d is maintained. By comparison, diverters would be on Stage 9 restrictions once flows drop below 50 ML/d. Any trading of entitlements would therefore not improve EGW’s access to low flows.

In the future, peak summer demand is projected to reach as much as 32 ML/d in 2060. The implications for EGW’s diversion conditions would be more significant at this time, since the maximum diversion remains 16 ML/d when flows are below 246 ML/d in the Mitchell River. This implies a greater likelihood and duration of periods when EGW would be unable to divert enough water to meet peak daily demands, and will therefore rely on drawing down storages.

At flows of 246 ML/d, irrigators would be on Stage 5 restrictions and therefore still have some security of supply. EGW could seek to effectively increase its diversion entitlement at these times by purchasing existing entitlements from irrigators, though the following issues would require resolution for this option to be considered feasible:

The mechanism for transferring irrigation entitlements to an urban entitlement would require discussion and negotiation with SRW

The availability and number of licences required for purchase would need investigation, including the optimal volume, the suitability of the attached diversion conditions, and the willingness of irrigators to sell their entitlements

The possibility of changing the conditions of EGW’s existing Bulk Entitlement to permit diversions of greater than 16 ML/d once flows in the Mitchell River exceed 46 ML/d should be discussed with SRW (though this is considered unlikely due to environmental considerations)

The purchase price of water allocations in the future is uncertain and would require evaluation alongside other options.

The social and economic impacts associated with a reduction in irrigated farming within the local region

It may be prudent to further evaluate this option as part of future WSDS revisions.


Comments on response to option, feasibility and further assessment:

This option is considered politically untenable in the short-term when EGW’s entitlement permits extraction of the equivalent of peak demand at relatively low flows, while other users face restrictions. With the impacts of climate change likely to result in reduced flows in the future, there will be increased competition amongst consumptive users for limited streamflows. Seeking an increase in bulk entitlement not only offers limited security of supply, but is also considered socially unacceptable.

This option has therefore not been assessed further as part of this WSDS.

In the longer term, EGW may consider applying for an additional winterfill entitlement if and when growth in demand outstrips current entitlements (and if entitlements are still available at that time – the Draft Gippsland Region Sustainable Water Strategy indicates there is currently 6 GL of winterfill entitlement available in the Mitchell River). However, additional modelling indicates that this would provide marginal benefit due to the limited periods during which additional entitlement could actually be sourced. This was therefore excluded from further analysis.

The additional option of a Flexible Corporate Water Licence evolved in response to this option. This is discussed further in the ‘innovative options’ section of this paper.

3.1.2 Increase Diversion Capacity

The maximum daily diversion permitted under the conditions of EGW’s long-standing Bulk Entitlement is 35 ML. The pump station has recently (2008) been upgraded to provide 30ML/d capacity which included the installation of new pumps (VSDs). The new winterfill entitlement permits EGW to extract up to 60 ML/d between July and October inclusively. To make full use of this entitlement the capacity of the diversion facility would need to be upgraded.

REALM modelling indicates that an upgrade to this diversion capacity would not significantly improve reliability of supply in the medium term (to 2025) or even in the long term. Diversion capacity is currently sufficient to supply the extraction rates permitted by the bulk entitlement conditions and to meet peak demand. Furthermore, the additional diversion capacity would only be available during winter and would not provide any additional supply when the storages draw down over summer.

Although the additional diversion capacity would enable the reservoirs to refill more rapidly during winter, modelling of the worst case 2060 scenario indicated that the reservoirs would still completely refill during winter during each of the modelled years. This assumes a 30ML/d diversion and a 10ML/d constant supply which would be required to prevent excessive drawdown during summer.

Operationally, it is thought that diversion rates could be increased to 40-45 ML/d if both of the existing pumps were run in parallel although more detailed investigation is required to confirm this theory. Running the pumps in parallel is not currently possible due to incoming power grid limitations and the pump station is permanently wired accordingly.

To date, no feasibility study has been undertaken to determine extent of upgrades required to increase the diversion capacity to 60 ML/D. Limitations are seen to be:

It may not be possible to physically locate larger pumps in the existing pump well.

Incoming power supply would need to be upgraded (currently unknown to what extent)

The intake pipeline may need upgrading due to suction velocity issues (potentially to 750mm)

Augmentation of the delivery pipeline would be required. Pumping at a rate of 60ML/d would result in velocities of 2.6m/s which would place significant additional pressure within pipework and necessitate larger pumps.

Therefore it is likely that a new offtake structure and a duplication of the existing 5km 600mm diameter pipeline from Glenaladale to Woodglen would be required. These works are estimated to cost in the vicinity of $5 million.



Since there is no demonstrable benefit from upgrading the Glenaladale offtake pump capacity, this option has not been assessed further.

3.2 Additional Storage Modelling has identified a deficit in water storage as a key constraint to meeting LOS objectives for the MRWSS in the future. Under worst-case impacts of bushfire and climate change, combined with high projections of population growth, it is estimated an additional storage of approximately 1,700 ML is required in order to meet EGW’s LOS targets at 2025. This volume reduces to 1,200 ML in the intermediate scenario.

In the past few years EGW has removed a number of open storages from the MRWSS as part of its program of water quality improvement. Where possible, EGW has covered these open reservoirs, but for some of the larger reservoirs such as Toorloo and Sarsfield, this has not been possible for various reasons. To counter this, EGW built the Woodglen Reservoir 2 (713ML, of which 698 ML is live storage), which was commissioned in 2010. The net impact has been a reduction in the overall bulk storage capacity in the MRWSS from 1818 ML to 1506 ML since the 2007 WSDS.

There are a number of options to increase storage capacity in the MRWSS including:

- Constructing a new bulk storage at Woodglen (Woodglen 3)

- ASR

- Recommissioning Toorloo Reservoir

- Recommissioning Sarsfield and or Wy Yung Reservoirs

3.2.1 Additional Woodglen Reservoir (No. 3)

During 2010 EGW commissioned a second Woodglen raw water storage with a total capacity of 713 ML (live storage of 698 ML), at a construction cost of $8 million. A third Woodglen storage would provide a further buffer against periods of low flow in the Mitchell River.

There is potentially suitable land available in the vicinity of the other Woodglen reservoirs that could be used for Woodglen Reservoir 3. A new reservoir would more than likely operate at different TWL due to terrain and the avoidance of previous borrowed areas. An alternative lining method may be required as it is likely that on-site clay volumes would be limited.


It was commented that another major storage augmentation should be deferred as much as possible by improving system losses and that investigation would be required to determine the optimal location and timing for another storage to be constructed.

Despite the challenges associated with a third Woodglen storage, this option represents the most straightforward and traditional approach to increasing system capacity to retain more of EGW’s new winterfill entitlement. The Draft Gippsland Region Sustainable Water Strategy notes that the Mitchell River is one of the few rivers in Victoria yet to be fully allocated. It identifies winter storage as a key future consideration to contribute to reliability of supply. It was considered that Woodglen 3 remains a viable option and was therefore selected for further assessment.

It is acknowledged that the optimal sites for raw water storage at Woodglen have previously been utilised and that additional storages will therefore come at a higher cost in the future.


3.2.2 Wy Yung and Sarsfield Reservoirs

EGW decommissioned Sarsfield reservoir (160ML, including live storage of 140ML) and one of the Wy Yung reservoirs (86ML, live storage of 79ML) as part of its program of water quality improvements. Lining, covering and recommissioning one or both of these reservoirs could provide up to an additional 246 ML of bulk storage. Based on costs incurred for the lining and covering of other basins in the MRWSS, it is estimated that recommissioning the Sarsfield Reservoir as a covered storage would cost approximately $3.5 million (Earth Tech 2005).

Recommissioning the Sarsfield reservoir would also provide additional emergency and operational storage to Bairnsdale, Nicholson, Sarsfield, Bruthen, Johnsonville and Swan Reach. Recommissioning the Wy Yung reservoir would provide additional emergency and operational storage for Bairnsdale, Eagle Point and Paynesville.


Given the spatial extent of the water supply network, a key operational consideration is ensuring water quality is maintained throughout the system. Reinstating the second Wy Yung storage and the Sarsfield storage would increase available clean water storage, but in doing so would also increase the retention time of treated water prior to delivery to customers. EGW aims to ensure that treated water passes through the system within 7 days. It is understood that utilising the existing storages at Wy Yung and Sarsfield would make this infeasible and jeopardise water quality by increasing retention times excessively.

This option is therefore considered infeasible and has not been evaluated further. These storages would therefore become redundant assets and it was commented that EGW should adequately plan to dispose of these redundant assets to meet the expectations of the community by restoring local environmental conditions.

3.2.3 Reinstate Toorloo Reservoir

The Toorloo Reservoir is an open reservoir with a total capacity of 450 ML (including 400ML of live storage) located at Lakes Entrance. As part of EGW’s program of water quality improvement, the Toorloo Reservoir was temporarily decommissioned in 2010. This ensures that water treated by the Woodglen Treatment Plant and supplied through the Main Supply Pipeline is not stored in a storage that is open to the environment at any point, therefore minimising the risk of recontamination post-treatment. Significant works would be required to reconnect Toorloo Reservoir to the upgraded MRWSS, particularly to rehabilitate the clay lining. With the recent transfer of EGW’s Bulk Entitlement and the most recent climate change predictions, the need for additional drought storage now provides an additional justification for these works that was not present at the time that the Toorloo Reservoir was decommissioned (AECOM, 2009).

In addition to providing additional long term drought storage, reconnecting the Toorloo Reservoir would also provide additional operational storage to balance peak demands on the main transfer pipeline from Bairnsdale to Lakes Entrance (Earth Tech, 2006). It has previously been estimated (AECOM, 2009) that this pipeline would reach capacity at approximately 2020. However, if the higher growth rates predicted by the recent Victoria In Future (VIF) projections are realised or if per capita consumption increases significantly, then this upgrade could be required even sooner. The cost of this pipeline was estimated at $12.5 million ($12 million Earth Tech 2008) but the cost could increase further if the higher growth scenario requires a larger pipeline. A 5.5km section of this pipeline between the Nicolson River and Sarsfield was recently replaced and there are plans to replace a 6km stretch of cast iron pipe from Sarsfield to the Metung Junction. It is recommended that a condition assessment be performed to determine the required timing for these planned upgrades as this will have a significant impact on the benefits associated with deferring future upgrades due to capacity constraints.

In order to maintain the high water quality standards of the recently upgraded MRWSS, the Toorloo Reservoir would need to be covered or alternatively a separate Water Treatment Plant constructed to effectively retreat water from the existing open reservoir. An appropriate treatment process to deal with disinfection by-products would need to be identified. These options are discussed in more detail below.


3.2.3.1 Cover Toorloo Reservoir

At a total capacity of 450 ML, the Toorloo Reservoir has a significant surface area that would need to be lined and covered in order to make it suitable for re-commissioning as part of the MRWSS. It is estimated that this would cost in the order of $7 million ($6 million Earth Tech, 2005) in capital costs alone.

The reservoir could alternatively be reduced in capacity by segmenting the total area and lining and covering a smaller storage. A 240ML reservoir with floating covers was estimated to cost in the order of $5 million ($4.3 million, EarthTech 2005).

Perhaps the most significant issue to be overcome with this option is the maintenance of a chlorine residual during periods of low demand (Earth Tech, June 2006). As organics will increase with residence time, rechlorination could result in elevated disinfection by-product (DPB) levels which may necessitate a WTP in the future if water quality regulations follow overseas trends and become more stringent over time.

Further investigation is required to determine the operational adjustments required to maintain water quality and to determine the most appropriate size of a covered reservoir at Toorloo to balance water quality, drought and operational storage to meet future demands.


As with the option to cover the Sarsfield and Wy Yung II reservoirs, the risk to water quality from significantly increased retention times is considered too substantial to warrant further consideration of this option at this time. Water stored in a reinstated Toorloo Reservoir could remain in place for years, limiting practical options for mixing or maintaining an acceptable chlorine residual.

The cost of lining and covering such a major reservoir would also be substantial.

The option to line and cover Toorloo Reservoir is therefore considered inappropriate and has not been assessed further.

3.2.3.2 Toorloo Water Treatment Plant

EGW had previously proposed to construct a water treatment plant (WTP) at the Toorloo Reservoir as part of its program of water quality improvements, though with the transfer of bulk entitlements to the Mitchell River and consolidation of the supply system from this end, construction of a WTP at Toorloo was no longer considered optimal.

An allocation of $5.5 M was made in the 2008-13 Water Plan for a 10.5 ML/d WTP at Toorloo, though this was replaced with an alternative project once the Toorloo WTP was abandoned. Operating costs are expected to be similar to that of the recently commissioned Woodglen WTP (estimated at $0.1/kL). While this is not considered significant, an additional WTP would possibly require additional specialised operations staff.

Although essentially resulting in water delivered to Lakes Entrance being treated twice, a WTP at Toorloo would nonetheless enable the reservoir to be recommissioned and provide additional long-term storage capacity.



EGW commented that re-treating water in a Toorloo WTP does not represent best practice, innovation or efficiency. There is also an expectation that health guidelines are anticipated to become more stringent over time (in line with international guidelines), particularly regarding DBPs. Conventional treatment is believed to be ineffective at removing DPBs, so although existing guidelines may be able to be met, any future changes could result in a Toorloo WTP failing to meet health requirements.

No single treatment process is understood to be capable of addressing all DPBs, so the costs and risks associated with water quality would need to be further assessed. (This is discussed further in a memo dated 28 April 2011 and entitled ‘Water Quality within EGW’s Water Supply Network’).

A new WTP at Toorloo Reservoir, incorporating a strategy to avoid generation of DBPs, would enable 400 ML of additional storage (of total capacity of 450ML) to be utilised for peak, drought and emergency periods. However, additional costs for enhanced treatment (such as reverse osmosis) to ensure compliance with future DBP limits should also be accounted for.

The additional flexibility provided by a new Toorloo WTP to meet peak demands in Lakes Entrance over summer may also delay future augmentations to the MSPL and Woodglen WTP, which otherwise constrain capacity of the system.

It was considered that the construction of a Toorloo WTP was still a potentially viable solution and that all of these benefits and risks should be considered further in the options assessment.

3.2.4 Aquifer Storage and Recovery

ASR provides EGW with the capacity to extract water from the Mitchell River during periods of high flow, particularly during the winterfill period of the recently transferred bulk entitlement, and to store those flows for future extraction when supply from the Mitchell River is less reliable. EGW is currently in negotiations with SRW for a licence to inject, store and extract 500 ML of surface water per year which is premised on injecting water into the aquifer by gravity flow from the Woodglen storages. Modelling and testing has indicated that water stored in the aquifer could be extracted at a rate of 2.7ML/d without significant impact to surrounding irrigation bores. Water quality modelling has suggested that TDS levels would be approximately 100 mg/L (AGT, 2010)

Additional investigation undertaken by AGT to date has established that the expansion of the ASR scheme to a capacity of between 1.2 and 5 GL/year may be feasible and is worthy of further investigation as part of a staged scheme development (AGT, 2010). Numerical modelling of three large-scale scenarios was undertaken by AGT in 2010 to determine the potential for ASR of 1.2 GL/year, 5 GL/year and 15 GL/year. While 15 GL/year is considered infeasible due to the constraints of the region’s hydrogeology, up to 5 GL/year could be achievable by expanding the Woodglen borefield and injecting under pressure. Although up to 57 bores would be required to inject 5 GL/year, an annual capacity of 1.2 GL may be feasible with the addition of between just 1 and 3 bores. However, it is noted that injection under pressure to achieve this volume may cause nearby irrigation bores to become artesian (requiring modifications to the headworks of neighbouring bores).

An increase in ASR capacity would be subject to extended and ongoing investigations in accordance with applicable guidelines and in consultation with SRW. Due to the uncertainty inherent in aquifer behaviour and ASR performance, an increase in future capacity will require a measured program of trials and monitoring.

Costs for ASR are expected to be predominantly operational at the scale of 500ML/yr, while larger schemes would require some moderate capital expenditure to establish additional borefields. The cost of this work would be in the order of $100,000 per bore plus additional connecting pipework. Operational costs are expected to include pumping costs, monitoring and water quality testing.



ASR is an innovative and best-practice solution that potentially utilises surface and ground water resources in a more sustainable manner. It requires comparatively little infrastructure and has a minimal social and environmental impact. This option was therefore responded to favourably and considered worthy of further evaluation.

EGW commented that current constraints could be addressed in the future by constructing additional bores in better locations that are specifically designed for ASR, significantly enhancing the performance of the scheme.

The key constraint on ASR is the local behaviour of the aquifer, which presently restricts extraction to 2.7 ML per day before levels are drawn down to a degree that is unacceptable to other users. REALM modelling indicates that if ASR is triggered when flows in the Mitchell River drop below 46 ML/d that volume of bulk storage required to meet LOS objectives could be reduced by 400 ML in the long-term.

ASR is less well understood than traditional options and requires ongoing monitoring and investigation. Should the local aquifers recover over time and a greater extraction rate become possible, ASR could become an increasingly viable and optimal storage option at even greater capacity.

3.3 Groundwater 3.3.1 Additional supply capacity at the Woodglen borefield

EGW successfully sought to transfer groundwater allocations for 120 ML/year to the Woodglen borefield constructed in 2007, though SRW previously refused to grant a licence on the basis that the aquifer has been declining over time. The Wy Yung WSPA and Stratford GMA are fully allocated (SKM, 2006), so additional groundwater licenses would need to be purchased in order to increase the capacity of the Woodglen borefield. These licences would cost between $1000 to $2000 per ML and additional bores would cost in the order of $100,000 each.

Initial approaches to licence holders as part of the ASR feasibility investigations have not been successful. It is therefore likely that EGW would need to pay a premium to obtain these licences and in doing so would need to consider the economic, social and political implications for the local community. ASR as an option has been considered separately in this paper as it is seen more as a mechanism for storing surface water rather than a new groundwater supply.


The pursuit of additional groundwater licences is considered socially and politically untenable, particularly given previous difficulties in seeking licences and Southern Rural Water’s earlier refusal to grant approval for any additional extractions. Groundwater use in the area supports vegetable production in particular, and the community is likely to resent efforts by EGW to pursue water allocations that currently sustain this industry.

The social implications of seeking further groundwater allocations were generally noted to render this option untenable. It was noted also that other major impacts on local aquifers, particularly offshore drilling, will continue to limit viability of this option for the foreseeable future.

The option to purchase additional groundwater licences has therefore not been considered further.

3.3.2 New borefield in the Unincorprated Area east of Woodglen

The majority of the MRWSS service area (beyond the Woodglen borefield) lies within an Unincorporated Area for groundwater management. This means that additional licences are available, although the potential yield and quality is likely to be lower than that of the aquifers in the Wy Yung WSPA and the Stratford GMA. The DRP (SKM, 2006) stated that the area to the east of Bairnsdale through to Lake Tyers exhibits groundwater salinities in the range from 1000 mg/L to 3000 mg/L, which is above recommended thresholds for drinking water. Although groundwater with salinity that is only marginally above recommended levels could be mixed with a fresh source to provide acceptable drinking water, this is not a preferable strategy for an extended duration.


A brackish water desalination plant could reduce salinity to levels suitable for potable water consumption. The key issues and likely costs associated with constructing such a plant are similar to those for sea water desalination although brackish water has significantly lower salinity levels which would greatly reduce energy consumption and slightly reduce capital and operational costs. Desalination of brackish water would also not require an ocean intake. Disposal of brine would be a major issue if an ocean outfall was found to be infeasible. Options for inland disposal are typically expensive; Coliban Water operates a brackish water desalination plant at Bridgewater which uses evaporation ponds to dispose of the brine.


Anecdotal evidence suggests there is a low likelihood of suitable groundwater resources being located within the Unincorporated Area that extends east of Bairnsdale. An initial desktop investigation found limited data on aquifer yields in the area, though typical salinities were found to be in the range of 1,000 mg/L to 3,000 mg/L and would therefore require brackish water desalination. Yields were noted as possibly high enough to sustain irrigation, though the reliability of supply is uncertain. Deeper aquifers (about which less is immediately known) may provide more viable yields. A search of the SKM Groundwater Database should be the first stage of further investigation to obtain a full inventory of groundwater users and potential aquifer yields in the area of interest.

The option is further disadvantaged by the high costs and potential environmental impacts of brackish water desalination should a sustainable groundwater resource be identified. Brine disposal, in particular, may be challenging in areas where ocean outfall is infeasible.

Although there is limited data immediately available to confirm the viability of this option, it was not considered infeasible and was therefore adopted for further assessment.

3.4 Demand Management Demand for the Mitchell system is expected to increase from between 27% to 107% over the next 50 years which will impact reliability of supply significantly. In recent years per capita demand in the Mitchell System has declined substantially. It is unknown to what extent this has been due to EGW’s waste minimisation strategy or if it is a flow on effect from Melbourne and other Victorian towns which have experienced severe restrictions. To this end, EGW faces a challenge in maintaining the recent demand reductions if drought conditions continue to ease. The modelling in this study assumes a 6% reduction in per capita demand by 2020. Implementation of additional water efficiency measures has the potential to defer key system augmentations significantly.

There are a wide array of indoor and outdoor demand management technologies available, and new technologies will continue to become available in the future. As a minimum, EGW should continue to implement its waste minimisation strategy which includes:

- Working with major customers to minimise their water waste

- Target significant sources of unaccounted for water throughout the system, where cost-effective

- Continued leak reduction program

- Keeping abreast of technological developments in water saving measures currently being investigated by Melbourne’s urban water utilities through EGW’s membership of the Victorian Water Industry Association.

Through this strategy, EGW has succeeded in reducing unaccounted water in the MRWSS from 25% in 2002/03 to consistently below the target of 10% for the authority’s whole service area. As EGW’s largest water supply system, it is important that unaccounted water in the MRWSS is continually monitored and maintained at a level below the 10% target. Reducing the level of leakage will slightly improve reliability of supply in addition to reducing system operating costs.



REALM modelling undertaken for the WSDS assumes demand management in line with government targets for per capita demand reduction that EGW is already working towards (and close to achieving). Having previously made substantial gains in reducing per capita demand, it is likely to be more difficult for EGW to maintain this rate of reduction in the future. Benefits from increased demand management could be expected to be subject to the law of diminishing returns, with increasingly higher expenditure required to make incremental improvements. The extent to which demand management can be implemented above and beyond that which has already been committed therefore requires further investigation.

Detailed end-use analysis may be required to better quantify the economic costs and benefits of continued demand management, including an assessment of the extent to which water conservation practices and water efficient appliances are currently adopted by EGW’s customers. This is a potentially detailed and complicated economic analysis, the benefits of which would need to be determined before being pursued.

It was generally commented that EGW should be better informed about (and have greater control over) system losses and unaccounted water within the MRWSS. It was also commented that continued efforts to reduce such losses are warranted and could have significant benefits in deferring future supply augmentations.

A literature review indicates that unit costs attributed to demand management are difficult to isolate, largely because they tend to vary for different systems. A report by Marsden Jacobs suggests that gains could be made at a cost of between zero and $1,450 per ML. Although comparison with other options on a unit cost basis is challenging, it is acknowledged that demand management has an important part to play in deferring infrastructure augmentations. By reducing the volume of water that must be extracted from the environment, as well as the energy used to treat and distribute it, the environmental benefits are also significant.

On this basis demand management was considered a viable element of a future supply strategy and was selected for evaluation in the options assessment.

3.5 Reduced Level of Service EGW’s current long-term operational objectives are that moderate restrictions (Stages 1 & 2) should not be required any more frequently than 1 in 10 years, and severe restrictions (Stages 3 & 4) no more often than 1 in 15 years. Through consultation with the community it may be possible to lower these level of service objectives to avoid or defer significant system augmentations and thereby minimise future increases in water rates. Engaging the community on this matter would prove challenging as significant consultation is already undertaken as part of the Water Planning process. An additional complexity is that like other regional water corporations, EGW has one tariff rate across all of its water supply systems. Any consultation would need to include businesses, industry and residents and would need to be approved by the ESC.


This option will be assessed by EGW during the development of the upcoming Water Plan 3. DSE are also currently reviewing implications for Level of Service as part of revisions to the WSDS guidelines.

The option to provide a reduced Level of Service has therefore not been evaluated at this time (though it is akin to the ‘do nothing’ option that is assessed as part of the options assessment.

3.6 Alternative water supplies 3.6.1 Recycled Water

Existing demand

EGW has achieved 100% reuse from its wastewater treatment plants since 2004/05 (EGW, 2010). The majority is utilised for agriculture, though recycled water from Bairnsdale provides important freshwater environmental


flows into Macleod Morass. While there may be some capacity to utilise a proportion of the discharges from the Bairnsdale wastewater plant for alternative uses, the Draft Gippsland Region SWS recognises that the majority remains important for these environmental flows.

An analysis of high-volume water users in the MRWSS shows that there are limited opportunities to offset demand for potable water by providing recycled water as an alternative supply. Nonetheless, EGW could investigate some key opportunities to provide recycled water to those major water users for whom recycled water could provide a secure supply of fit-for-purpose water. Such uses may include irrigation of golf courses and recreational space, farm irrigation, and wash-down.

Future demand

The two major centres of the MRWSS, Bairnsdale and Lakes Entrance, are projected to grow at a significant rate in the future. This would provide additional wastewater flows that could be treated and returned to new Greenfield developments through a dual pipe network from either a new local treatment facility or via an upgrade of the existing WWTPs at Bairnsdale and Lakes Entrance. Wastewater would need to be treated to Class A quality.

The East Gippsland Shire Council’s Bairnsdale Growth Strategy (EGSC, 2009) indicates that, while significant infill is predicted to occur within the town, a large area in north-east Bairnsdale has been identified for substantial residential growth (Figure 1). Incorporating a dual pipe recycled water scheme within this precinct could displace a proportion of new potable demand, effectively delaying future supply augmentations.

A preliminary investigation of this option found the following:

- A localised Recycled Water Treatment Plant (RWTP) with a capacity of 1 ML/day is estimated to cost $5 million, with an operating cost of approximately $2/kL

- As a comparison, a 5 ML/d upgrade of the existing Bairnsdale WWTP to cater for future growth in flows would cost in the order of $7 million with operating costs of approximately $0.8/kL for the RWTP component.

- A 1 ML/d RWTP could supply more than 2,000 properties with approximately half of their daily demand (including toilet flushing, laundry use and garden irrigation)

- The Bairnsdale Growth Strategy identifies 197 hectares of vacant residential-zoned land and determines that this equates to 14 years’ supply at current take up rates and a yield of 7.6 dwellings per hectare (approximately 1,500 properties)

- Challenges associated with a RWTP include: determining a suitable site; balancing flows to and from the plant (particularly during early stages of development); storage for balancing peak demands; risk management; increased O&M requirements; community acceptance

- Benefits include: a secure supply of water for irrigation during water restrictions; offsetting or delaying infrastructure upgrades; avoided treatment and pumping costs for the bulk supply system, reduced discharge of wastewater to the environment

- It should be noted that the economic case for water recycling is distinctly improved where recycled water is used as a direct potable replacement (since an alternative network is not required). However, it is recognised that this is contra to current government policy.

Avoided costs associated with this option are considered to be minimal. Currently wastewater discharges into the Macleod Morass provide an environmental benefit. It is possible that future increases in wastewater flows to the Bairnsdale WWTP may exceed the requirements of the Macleod Morass at which time an additional reuse option would be required. However, it is anticipated that irrigation of nearby properties could present a relatively low-cost reuse option at this time.


Figure 1: Growth strategy plan for Bairnsdale (from Bairnsdale Growth Strategy, EGSC 2009)


Recycled water is a valuable alternative resource that should be utilised for fit-for-purpose applications wherever possible. However, given that EGW has previously and consistently achieved 100% recycling it is likely that immediate scope is limited for recycling schemes that substantially displace current potable consumption.

Decentralised treatment plants to service new growth areas may decrease new potable demand in those areas, though their relatively slow development (and cost) limits the benefits for the broader MRWSS as a whole. Future improvements in treatment technology may enhance these opportunities (or at least improve cost effectiveness). External funding opportunities in recognition of their broader benefits may also improve the viability of these schemes.

It was recognised that there will be continued focus on alternative supplies such as recycled water at a strategic and policy level in the future. Given EGW’s record in implementing water recycling and its value as an alternative water resource, recycled water was also selected for further assessment

3.6.2 Rainwater

Rainwater tanks can provide an alternative source of water at the property level for non-potable applications including toilet-flushing and garden watering. Rainwater tanks can also be augmented with filter treatment to provide a source of potable water. The Victorian Government offers rebates to water authority customers for rainwater tanks and other water efficient products, with the program currently extending to June 30 2011.

The Mitchell River currently provides a low cost, low energy supply during all but the driest years. For rainwater to improve the system’s reliability of supply, it would need to have sufficient storage size and capture area to provide a reliability of greater than 90%.


Modelling of historic rainfall data in Lakes Entrance suggests that a 20 kL tank would provide 90% reliability of supply for a demand of 250 L/ household per day (based on an average roof area of 200 m2). This estimate of reliability would be improved by increasing rainwater tank size or roof area, but could also be undermined by expected reductions in rainfall associated with climate change. It could also be considered that a rainwater tank in excess of 20 kL capacity is, for some properties, approaching a size that imposes excessively on available space.

Given the volume of water that can be supplied it appears that there is minimal benefit in treating the rainwater to potable standards. The capital and operating costs of the filter will far exceed any benefits provided by the minimal increase in supply.

In a new development of 2,000 properties at an approximate cost of $4,500 for a 20 kL rainwater tank incl. pump, plumbing and installation (Marsden Jacobs, 2007) the capital cost would therefore be $9 million for 0.5 ML/d of local supply. Additional benefits that should be accounted for include:

Provides additional supply for homeowners for garden irrigation during water restrictions;

Offsetting or delaying infrastructure upgrades through demand reduction and peak levelling

Providing a backup emergency supply in the event of a failure with the main supply system

Reduced discharge of nitrogen to the stormwater system and thereon from the Gippsland Lakes

Utilising a local water source can reduce pumping costs associated with water supply transfer

As rainwater cannot cost effectively provide 100% reliability of supply, a potable supply network is still required. It may be possible to downsize the potable supply network in the new development; however the cost savings are expected to be marginal given that the system would still need to supply fire fighting demands and peak supply during extended dry periods.


Rainwater tanks have a valuable place in managing available water resources and have been widely adopted during the recent dry period. Their use reduces demand on the potable system by providing fit-for-purpose water for garden irrigation, which also encourages customers to actively consider their water usage and embrace water conservation more readily. It is possible that the widespread use of rainwater tanks may in fact prevent ‘bounce back’ in demand once water restrictions are lifted, since many will be able to continue to utilise rainwater rather than reverting to watering gardens from the potable supply.

Although rainwater tanks may reduce potable demand during normal or wet years, they provide little security of supply during extended dry years at which time customers would revert to reliance on the potable system. Given the very high marginal cost of storage (compared with bulk alternatives), as well as difficulties in regulating the implementation, maintenance and operation of rainwater tanks, this option is not considered suitable as a structured component of the MRWSS.

EGW commented that rainwater tanks may yet be mandated as part of new dwellings in the future as part of 5-star water efficiency ratings. However, it was also commented that retro-fitting has been proven in other metropolitan areas not to be viable.

Since rainwater tanks are not an effective or economic source of additional drought storage for EGW, this option has not been assessed further.

3.6.3 Stormwater

The Draft Gippsland Region SWS states that opportunities to use urban stormwater as an alternative water source are greatest:

- Near its source

- In new urban growth areas or redevelopment areas

- Where environmental and public health risks associated with its treatment and use are low

- Where it can be utilised to safely increase infiltration and/or groundwater recharge

- Before it enters a waterway.


As local government is primarily responsible for urban stormwater management, the SWS also notes that the best outcomes for management of urban stormwater will be achieved with local government, catchment management authorities and water corporations working together.

In a similar manner to recycled water, opportunities to utilise stormwater are likely to be optimal in new developments, where water sensitive urban design (WSUD) provides an opportunity to capture, treat and utilise stormwater and can be incorporated at the design and construction phase. Stormwater harvesting and treatment is typically achieved by incorporating wetlands into urban design, which serve both to store collected stormwater and improve water quality by removing nutrients. Further treatment in a localised treatment plant may then be required, with the extent of treatment dependent on the final intended use. Costs associated with stormwater treatment are estimated as follows:

- A new wetland is estimated to cost in the order of $1 million, with operation and maintenance a further $20,000 per year

- Further treatment to non-potable standard (for use in toilet flushing, laundry or for irrigation) would cost approximately $1.5 million for a 1 ML/d plant, with opex estimated at $1.5/kL

- Treatment of stormwater to potable standard would require multiple treatment barriers and therefore has a higher cost of up to $9.5 million for a 1 ML/d plant, with opex of $2/kL

Stormwater capture and reuse has the following implications:

- Significant storage is often required to balance seasonality of flows and maximise the volume of stormwater captured and available for reuse

- Stormwater contains high concentrations of nutrients which ultimately end up in the Gippsland Lakes which is already susceptible to algal blooms from excessive nutrient loadings (DSE, 2010). Reductions of nutrient discharges from stormwater contributes to a relatively minor proportion of the nutrient runoff into the Lakes, there are some environmental benefits which would likely provide opportunities for external government funding.

- Utilising a local water source can reduce pumping costs associated with water supply transfer

- Incorporating wetlands and water bodies into new developments can have aesthetic and amenity benefits

- Water quality and treatment requirements need to be matched to the end use

- The volume of stormwater available is dependent on the size of the catchment, as well as the extent of impervious surfaces such as roofs and roads.

- Provides additional supply for homeowners for garden irrigation during water restrictions;

- Offsetting or delaying infrastructure upgrades through demand reduction and peak levelling,

- Providing a backup emergency supply in the event of a failure with the main supply system (potable reuse only)

In existing areas, the potential for implementation is limited to large scale individual users such as golf courses, sporting ovals or industry due to the cost of retrofitting individual residential properties. In new developments, there may be potential to supply up to 50% of demand, although it is not possible to accurately quantify this without detailed modelling. East Gippsland receives high rainfall by comparison to much of Victoria and therefore has good potential for stormwater capture and reuse however the availability of this supply source would also be reduced by the impacts of climate change and would be least likely to be available in extreme dry years when it would be most required. The other key challenge is identifying sufficient storage at low cost to ensure reliability of supply, particularly accounting for future changes in rainfall (both patterns and volumes) due to climate change.



Stormwater is a valuable water resource, the use of which also has significant environmental benefits by reducing nutrient discharge to the environment. Stormwater is also inherently variable as a supply source and requires sufficient storage to capture flows during wet periods.

It was generally acknowledged that WSUD and stormwater harvesting should be integrated within new developments as best practice, both to reduce nutrient discharges to waterways and maximise use of available water resources. Although it is feasible to treat stormwater to potable quality, the high marginal cost (above treatment for non-potable use) makes this generally uneconomic unless provision of potable supply (such as extension to a new demand centre) is more expensive.

Despite the uncertainty around the capacity of stormwater to provide a reliable and secure supply, the environmental benefits of utilising this available resource warrant its inclusion for further investigation. It is noted also that external funding opportunities are likely to exist and that stormwater harvesting will continue to be an element of government’s water strategy and policy.

Some opportunities for stormwater harvesting have been identified within the MRWSS (including Magee’s Gully in Bairnsdale),

3.6.4 Seawater Desalination

Seawater desalination has been adopted in most capital cities in Australia in recent times as a climate-independent component of water supply systems. EGW’s area of service includes an extensive coastal region, which provides the potential for desalination as an additional supply source.

Desalination is an energy-intensive process, and would increase the organisation’s carbon footprint. There are options to offset the increase in emissions, however this would add to the cost of the project. Other major environmental considerations include the impacts on the local marine environment from brine discharges. The broad extent of the Gippsland Lakes (a Ramsar-listed site) and other pristine coastal environments within EGW’s service area would necessitate a comprehensive site selection process and environmental assessment should desalination be pursued. The most likely alternative would be to locate the plant within the existing Toorloo Reservoir which would enable the intake and brine outfall pipelines to avoid any crossing of the Gippsland Lakes. It would also provide a local supply for Lakes Entrance.

Indicative desalination costs are often uncertain, due to the varying range of inclusion within reported costs (such as brine discharge, power supply and distribution). Costs estimates for desalination from a report entitled ‘Desalination in Queensland’ (GHD for the Department of Natural Resources and Mines, July 2003) indicates the cost of a 9 ML/d reverse osmosis (RO) plant as approximately $33 million, with an annual operating cost of $3.4 million.

Central Highlands Water recently constructed two small brackish water desalination plants (approximately 0.5 ML/d) at a cost of around $5 million each. The small scale of these plants suggests that there is a substantial minimum cost for desalination before some economies of scale are possible.

Initial modelling indicates that a 5ML/d plant would have the same impact as 1000ML of additional storage.

Other considerations for this option are:

Desalination would provide a local supply which would provide EGW greater operational flexibility

Locating the plant at Lakes Entrance would defer the planned upgrade of the MSPL and provide additional security of supply to Lakes Entrance.

If energy prices increase significantly in the future or if the organisation’s costs to manage greenhouse gases increase (eg. the implementation of a carbon price), the operational costs of desalination would also increase substantially



In comparison with surface water, rainwater and stormwater, seawater desalination provides a secure and reliable supply of potable water that is independent of climatic conditions. An additional supply at the eastern end of the MRWSS would provide greater flexibility and potentially defer upgrades of the MSPL, as well as reduce pumping costs from Wy Yung. However, given the high operational cost of desalination, further investigation would be required to optimise the size and operation of such a plant to ensure that peak demands can be met, whilst maintaining turn-down capability such that the whole supply system can continue to deliver water at lowest cost. A small, containerised or mobile desalination unit was proposed as one means of providing this flexibility.

Responses to desalination reflected the benefits provided to operational flexibility and security of supply, though it was acknowledged that there are significant financial and environmental challenges, particularly relating to energy consumption.

Although there is currently surplus surface water available to the MRWSS during winter, desalination is the only alternative supply that provides reliable, secure supply independent of climatic conditions. It was therefore included for further assessment and comparison with other options.

3.7 Water Cartage Water carting should only be considered as an emergency supply in the event that water storages approach critically low levels or quality of supply is compromised. For a water supply system of the scale of the MRWSS, water cartage is impractical and expensive. The DRP (SKM, 2006) notes that approximately 110 trips per day would be need to be made by a 15 kL tanker to supply the minimum requirement of 60 L per person per day to every town in the Mitchell system. A potential alternative supply to the Mitchell River is identified as Lake Glenmaggie on the Macalister River, approximately 90km west of Bairnsdale.

Although water carting is not recommended as a viable supply alternative, it may be considered in extreme conditions. It may also be utilised to supply remote parts of the system during supply emergencies; for example, one 15 kL tanker could provide the minimum requirement of 60 L/c/d to Nowa Nowa.

Comments on option feasibility:

Water carting is not viable for a system the size of the MRWSS. This option has not been considered further.

4.0 Innovative Options The following options were identified in response to initial feedback from the briefing paper that suggested that some more innovative or lateral options should be explored. These options have not been considered in the options assessment at this stage and instead will be discussed at the upcoming assessment workshop to gauge the level of interest in pursing them further.

4.1 Desalination barge What:

A desalination plant could be mounted on a barge to provide emergency supply to coastal communities including Bairnsdale/Lakes Entrance, Marlo, Bemm River and Mallacoota. The barge would be mobile and could therefore be floated along the coast to the desired location. A brine discharge line would not be required, but a pipeline connecting the barge to the supply systems for each town would be.

This been implemented in Santa Catalina Island (USA), Saudi Arabia (large scale) and proposed in Brisbane (also large scale).

Feasibility:


Excerpts from www.subseainfrastructure.com :

“All the containerised pre-treatment and reverse osmosis equipment is placed on a barge, ideally located in calm water approximately 1km from the shoreline.

The tanks are built into the base of the barge. Power can be obtained from the shore (via cable) or from onboard generators.

The only onshore requirements will be the delivery pipeline and the electricity cable, therefore the impact to the coastline will be minimal.

At the end of the contract period, the desalination equipment can be disconnected from the infrastructure and moved to an alternate location. The onshore infrastructure can remain at the location for future use.”

The size of the barge would need to greater than 3ML/day to have a significant impact on supply for the Mitchell System. This size would be greater than that needed for other coastal communities. Installing the connecting pipeline would be challenging and it is likely that cheaper supply alternatives would be available it the infrequent event that emergency supply is required. Costing this scheme is not possible at this stage however it is likely to be more expensive than a fixed desalination plant when pipe connections and operating costs and considered. The barge would need to be constructed to a high standard for OHS requirements.

Recommendation:

It is suggested that this be considered further only if desalination is to be included in EGW’s future water supply portfolio.

4.2 Green City What:

EGW could partner with EGSC to promote Lakes Entrance and or Bairnsdale as a Green City. Part of this would be to target worlds best practice water efficiency and sustainable water management, thereby reducing the reliance on traditional water sources. This could be a positive initiative for a community such as Lakes Entrance which has endured recent hardships due to floods and the impacts of climate change. This option could also be extended to a Green Region including Bairnsdale or even further for the entire East Gippsland Shire.

The initiative would extend beyond just water and also promote clean renewal energy sources such as wave power. It would also promote tourism. It would also support the Future Cities concept recently developed by IWA in partnership with the Australian and International water industries.

Feasibility:

Would need to liaise with Council and would require significant government funding. EGW should initially establish whether or not funding is available to undertake a project of this scale.

Recommendation:

This proposal should be discussed with Council and should this option be supported then further consultation with the relevant government agencies should be undertaken.

4.3 Direct Potable Reuse What:

Direct potable reuse occurs when treated wastewater (recycled water) is added directly to the potable or drinking water supply. Extensive treatment and hence large energy input is often required for these types of schemes. Direct potable reuse has occurred at the following locations:

Space Stations (current) Windhoek, Namibia (http://www.wateronline.com/article.mvc/Direct-Potable-Reuse-As-A-Source-Of-

Water-0001?VNETCOOKIE=NO) (current) Demonstration project in the USA (finished) Chanute, Kansas (1956 – 1957)

While there are several ‘indirect potable schemes’ around the world very few ‘direct potable reuse’ project exist.

Feasibility:


While not considered to be presently politically tenable, this may change if the worst case climate change projections are realised. Direct potable reuse can utilise existing distribution infrastructure thereby reducing the cost of recycling substantially. It would however require significant energy consumption. While this option is currently not considered acceptable in Victoria, the situation should be monitored and this alternative should be explored should the government position change.

Recommendation:

The opportunity to undertake ‘direct potable reuse’ should be considered in future WSDS updates (should it be a permissible alternative in terms of government policy).

4.4 Regional Water Grid What:

A pipeline connecting to Sale would enable the Corporations to transfer water from one region to another in the event of a severe water shortage.

Feasibility:

This option will require substantial capital investment. It is likely that if one of the water supply systems is experiencing a severe water shortage, then the other would also be having similar problems. A regional desalination plant would therefore be required to justify this option, further adding to the capital costs. Given that there is substantial winter fill water still available within the East Gippsland region, it is considered that storage is likely to be a more cost effective alternative to ensure reliability of supply into the future.

Recommendation:

This option is not recommended as the benefit cost ratio is likely to be low.

4.5 Power Stations What:

Currently the Power Stations in the Latrobe Valley consume a substantial volume of water for cooling. The Gippsland region SWS states that there is significant uncertainty about the future of this industry and whether it will consume more or less water in the future.

If the amount of water used by this industry declines, this water could be transferred to East Gippsland. The length of pipeline required would be cost prohibitive, therefore a reallocation of entitlements would be required to enable East Gippsland Water to access a supply source closer to home.

Feasibility:

This option carries a large degree of uncertainty as it is wholly dependant on the power stations ceasing operation/significantly reducing water demand. It is also uncertain that allocations would be approved for transfer as the regions water sources are reportedly over allocated.

Recommendation:

Given the uncertainty associated with this option it is not recommended at this point in time. EGW should however continue to monitor trends in water use throughout the region and to actively participate in regional planning efforts.

4.6 Flexible Corporate Water Licence What:

EGW is keen to investigate an unprecedented licensing arrangement in which its entitlements to surface and groundwater are effectively combined. This is premised on harvesting a greater allocation from the Mitchell River at times when flows are high and using that water to recharge local groundwater aquifers. At times of low surface water flows, EGW would then expect to be able to draw on their entitlement from groundwater rather than the river.


Feasibility:

This concept has been developed at an academic level but is yet to be implemented in practice. Considerable discussion and negotiation with natural resource managers (DSE, CMAs, SRW) would be required, as well as monitoring and investigation commensurate with the nature of the proposal.

Recommendation:

It is recommended that EGW initiate discussions with the relevant agencies to determine whether or not this option is likely to be a viable alternative. This will allow EGW to determine whether or not this option warrants further consideration. The initial work completed with ASR at Woodglen could be used as a catalyst for this discussion.


C:\Users\wallners\Documents\2Work\EGW\Final Draft_MRWSS Water Supply Demand Strategy.docx Revision E - 10 August 2011 C

Appendix C

Issues Optioneering Report

http://vpo.au.aecomnet.com/projects/vsab09883/8issueddocs/8.1 reports/final approved reports/mitchell/final/appendices/appendix c - ior mitchell bulk storage v9.doc

Draft Issues Optioneering Report

TRIM DOC Ref #:

SUMMARY (no more than 1 page)

Title: Mitchell Water Supply System – Bulk Storage Revision # 1.0

Author: Nick Clarke Reviewed: Steven Wallner Date: 10/9/2011 Issue Source

Problem:

Additional bulk storage and/or supply is required to meet Level of Service targets Includes the following WP3 Projects: 41 – Woodglen ASR 42 – Toorloo Tank/Storage 45 – Woodglen Entitlement / Purchases (surface/ground) 96 – Glenaladale PS upgrade 103 – Woodglen new storage

Risk based Y

Solution:(incl timeframe)

Renewals N

Capital Costs:

Growth Y

Stage: (tick box)

Firs

t Iss

ues

Opt

ione

erin

g

(AEC

OM

) Pr

elim

inar

y

Rev

iew

(DS

&

Tech

nica

l

Rev

iew

(Hut

,

Cuz

, Dag

) In

tern

al E

GW

Rev

iew

(MS,

EM, S

VR)

Supp

lem

enta

ry

EGW

Rev

iew

(TS,

RC

, DB)

Fina

l Dra

ft

Shor

tlist

Cos

t and

Ris

k

Rev

iew

Boar

d R

evie

w

ESC

Rev

iew

Del

iver

y

Prev. Id’d Y

1

Project (during delivery)

(0-10) RRR

Strategic (during operations)

(0-10) RRR

RRR = risk register reference (DOC/10/30151)

Inherent Risk Rating:

Residual Risk Rating:

Budget Scheduling

($’000) 14/1

5 15

/16

16/1

7 17

/18

18/1

9 19

/20

20/2

1 21

/22

22/2

3 23

/24

24/2

5 ...

/…

Capex

Pre-design/planning

Design

Construction

Decommissioning

Opex

Decom

http://vpo.au.aecomnet.com/projects/vsab09883/8issueddocs/8.1 reports/final approved reports/mitchell/final/appendices/appendix c - ior mitchell bulk storage v9.doc Page 2 of 16

No

1 Introduction & Background Information

The Mitchell River Water Supply System (MRWSS) is EGW’s largest system, servicing a population of more than 25,000 in towns between Bairnsdale and Lakes Entrance, as far north as Bruthen and as far east as Nowa Nowa. Raw water is almost entirely supplied from the Mitchell River, though EGW also holds licences for 120 ML/year of local groundwater sources at Woodglen. Historically EGW also had the option to use the Nicholson River during times of drought, though EGW’s Bulk Entitlement for the Nicholson River has recently been transferred to the Mitchell River as winter fill in order to provide greater security of supply. The system comprises the 32 ML/d Glenaladale offtake on the Mitchell River, a single water treatment plant with a capacity of 20ML/day, a number of water storages and tanks, and 21 pump stations. EGW constructed five groundwater bores at Woodglen in 2007 to provide emergency supply when the Mitchell River deteriorated significantly in quality following major bushfires in the catchment. Trials for Aquifer Storage and Recovery (ASR) are expected to result in a licence permitting up to 500 ML/year to be injected and extracted at the borefield. The previous Water Supply Demand Strategy (WSDS) for the system concluded in 2007 that there was adequate supply and infrastructure to meet Level of Service obligations within a 50 year horizon. However, this was premised on a number of key assumptions:

provision of a groundwater allocation of 2,500 ML/year (which has not eventuated) climate change predictions (Jones and Durack) that have subsequently been revised some consideration of bushfire impacts, though at a lower extent than that subsequently

modelled for DSE population projections from 2003 Victoria in Future (based on the 2001 census), which

were increased significantly in the 2008 revision (following the 2006 census) a total system live bulk storage volume of 1,818 ML streamflow records at the time did not include the significant low flow event of 2006/07.

Although these assumptions were correct at the time, changing conditions and evolving science has led inevitably to the need to revise these assumptions for the current WSDS, which includes:

climate change projections (from SEACI) currently recognised within the industry as the most applicable, which predict a more severe impact on streamflows in the future


population projections from 2008 Victoria in Future streamflow records including recent low flows (2006/07) a live bulk storage volume of 1506 ML.

By 2018 (the conclusion of the next Water Plan period), it is anticipated that between 2000ML and 2,500ML of total storage will be required (or an additional 500ML to 1,000ML at Woodglen). Under the intermediate scenario for climate change, bushfire impacts and demand for, it is estimated that an additional 700 ML of storage is required by 2018 in additional to EGW’s proposed ASR operations. Alternatively an additional constant supply of approximately 5 ML/d that is independent of climate (such as desalination or recycled water) could provide a similar level of reliability. This reversal from the findings of the previous WSDS (SKM, 2007) is due to the combined impacts from changes in key inputs and assumptions, particularly:

reduction in available storage resulting from EGW’s Water Quality Improvement Program a greater impact from climate change than previously projected population projections twice those of previous estimates more severe impacts on streamflow predicted from recent bushfires.

It is evident that climate change and population projections, in particular, not only influence results significantly, but should also be attributed the greatest uncertainty. This therefore reflects the importance for EGW to adopt a flexible strategy capable of both addressing immediate and short-term requirements, as well as having the capacity to be readily updated and adjusted in response


No

to revised projections in the future. A long list of options to contribute to improving future reliability of supply was initially generated. From a preliminary review of the options identified, the following were considered ‘fatally flawed’ and unsuitable or inappropriate for further assessment:

Solution type Option identified Reason for not taking forward

Additional surface water supply

Additional bulk entitlement Politically and socially untenable while EGW has sufficient existing allocations

Increased diversion capacity Modelling indicates there is no demonstrable benefit

Additional storage


Retention times would exceed EGW’s target^ and unreasonably jeopardise water quality

Line and cover Toorloo Reservoir

Additional groundwater supply

Additional capacity at Woodglen borefield

Politically and socially untenable to seek additional entitlements (currently fully allocated)

Reduced Level of Service Reduced Level of Service EGW to assess during Water

Plan 3 development

Alternative water supplies Rainwater

Considered technologically flawed since security of supply not provided during dry periods

Water cartage Water cartage Infeasible at the scale of the MRWSS

^EGW is preparing a draft operational policy that includes an objective that water age within its water supply systems does not exceed a target of 7 days. The short-list of remaining options assessed in this IOR includes:


Additional storage Additional raw water storage (Woodglen 3) Toorloo Water Treatment Plant (WTP) Aquifer Storage and Recovery (ASR)

Additional groundwater supply Desalination of brackish groundwater in Unincorporated Areas

Demand management Leakage reduction, community education and other programs

Alternative water supplies Recycled water Stormwater Seawater desalination

The options are discussed in some detail in a Briefing Paper (22 November 2010) completed by AECOM and reviewed by EGW. This report will therefore focus on summarising key issues associated with each option and a relative evaluation of the alternatives against the specific criteria. A number of lateral or innovative options have also been identified, which have been considered at a high level only and have not been assessed further at this time. They include:

Option Description Desalination barge Mobile desalination barge capable of providing supply to

different coastal locations as required Green City Partner with local government to implement world’s best

practice in sustainable water management in major towns Direct Potable Reuse Treatment of recycled water to high level for direct supply

into potable system Regional Water Grid Transfer of water from external catchments (pipeline from


No

Sale, probably with desalination plant) Power Stations Transfer of water (or entitlements) from Latrobe Valley

power stations as their consumption decreases (due to efficiency or closure)

Flexible Corporate Water Licence

Combine entitlements to surface and ground water such that periods of high flow are used to recharge aquifers, which can then be drawn on at periods of low flow.

2 Inherent Risks, Objectives & Benefits (strategic risks)

The inherent risk drivers as given in EGW’s strategic risk register associated with this project are: 01-02-01: Inadequate long term planning results in failure to meet required service

standards 01-02-04: Failure to plan for impacts of Climate Change projections in new infrastructure

design and development resulting in failure to meet performance targets and undue financial costs

The objectives of this project are: To meet the requirements of customers, government and stakeholders To ensure that infrastructure requirements identified by water supply planning are

implemented in an optimal way in order to meet future Level of Service targets To achieve sustainability in all aspects of EGW’s business

The benefits to the Corporation should this project proceed are:

Securing water supply for EGW’s largest system Increasing operational flexibility Reducing frequency of water restrictions and associated impacts on revenue

3 Constraints & Assumptions

Cost estimates have been undertaken at a high level and should not be considered appropriate for budgetary purposes

REALM modelling indicates that an additional supply of 5 ML/d reduces additional storage requirements by 1000 ML. The net unit cost of additional supply options has been determined on a pro-rata basis (eg 2 ML/d is equivalent to 2/5 of 1000 ML, or 400 ML of bulk storage)

4 Options Assessment (include scores for each attribute consistent with DOC/09/1860 – MINIMISE SUBJECTIVITY, MAXIMISE OBJECTIVITY)

4.1 Option 1 – Do Nothing

Modelling indicates that the MRWSS is currently operating approximately within EGW’s targets for Level of Service. In a future impacted by climate change, as well as the effects of past bushfires and increasing demand from a growing population, there is an expected deficit in supply in the MRWSS. If no action is taken to either increase storage capacity or provide additional supply, EGW can expect the need to implement water restrictions more frequently in the future. In order for EGW to meet the obligations of its customer charter in this instance, the community would need to be consulted to determine an acceptable Level of Service that meets their expectations.

4.1a

Economically Viable (incl. NPV analysis)

While there are no additional capital costs attributed to the ‘do nothing’ scenario, more frequent restrictions will have implications for revenue. 5.0

4.1b Socially Acceptable

EGW is bound by a Customer Charter to provide certain levels of service relating to 1.0


No

water supply quality and quantity. Failure to meet these basic levels in the future due to lack of planning will be justifiably perceived as unacceptable by the community.

4.1c


There is limited flexibility in the current MRWSS to provide supply under ‘worst case’ scenarios of future climate change, bushfire impact and high population growth. 2.5

4.1d Environmentally Responsible

No change implied from current practice. 3.3

4.1e

Politically Tenable

It is unacceptable for EGW to fail to implement actions to secure supply for the future. The Victorian Government expects water authorities to plan adequately to meet future demand, with the requirement for Water Supply Demand Strategies to be completed every five years to outline how a secure supply will be provided over a 50-year horizon.

1.0

4.2 Option 2 – Woodglen 3

An additional raw water storage (nominally ‘Woodglen 3’) would provide greater capacity to store more of EGW’s new winterfill entitlement. Although a suitable site would need to be identified, a duplication of the recently completed 713 ML Woodglen 2 storage is assumed (operational storage of 650 ML) for costing purposes.

4.2a


A new raw water storage is assumed to cost more than the $7m spent in 2010 on Woodglen 2, since the optimal sites have been utilised and Woodglen 3 would need to be either further away and/or require imported materials. An inflated cost of $10m has been assumed to account for these constraints. Regardless, the economies of scale attributed to large bulk storage result in a favourable NPC of $14,200 per ML of additional storage.

2.7

4.2b

Socially Acceptable

Off-stream storage is considered a traditional approach and therefore to align with community expectations. Given the pressure on summer flows, there is likely to be general support for capturing winter flows in lieu of increased extraction at times of lower flow and greater demand.

4.2

4.2c


A suitable site would need to be located, including consideration of topography, elevation and particularly ground conditions (including avoiding previous borrow pits). This is otherwise a traditional approach that is consistent with the current system arrangement. However, it further consolidates the Mitchell River (and associated extraction and treatment infrastructure) as the sole system supply, providing no additional operational flexibility at the Lakes Entrance extremity of the network.

3.4

4.2d


Pumping arrangements have the most significant implications for energy consumption and therefore greenhouse emissions. It is assumed a site at suitable elevation can be identified such that pumping requirements from the Glenaladale offtake are minimised and raw water can then gravitate to the Woodglen WTP. However, given that the existing Woodglen storages occupy the optimal sites in the area, pumping requirements will be greater than at present. Under warmer conditions predicted due to climate change, evaporative losses from open water storages are likely to increase in the future. This will provide additional

3.9


No

demand on increasingly scarce water resources.

4.2e

Politically Tenable

Increased winter storage aligns with the draft Gippsland Region Sustainable Water Strategy and should therefore be expected to be supported by Government. 5.0

4.3 Option 3 –Toorloo Reservoir Water Treatment Plant (WTP)

It was previously proposed to construct the Toorloo WTP to meet water quality requirements for Lakes Entrance and neighbouring towns. This option was rejected in favour of implementing a completely closed supply system, with water treated at the Woodglen WTP. Toorloo Reservoir was subsequently temporarily decommissioned. Although this option implies treating water a second time (with associated risks attributed to disinfection by-products), a Toorloo WTP would enable the Toorloo Reservoir to be recommissioned, providing additional storage of 450 ML (400 ML live storage). It would also potentially defer upgrades to the MSPL and the Woodglen WTP. There is, however, a risk that changes to drinking water guidelines could limit the efficacy of the proposed WTP for achieving adequate removal of disinfection by-products (DBPs) in the future. It has been assumed that the WTP would need to be upgraded to include a reverse osmosis (RO) plant in order to remove DBPs and comply with more stringent drinking water guidelines in the future. Nonetheless, no single treatment option will comprehensively target DBPs and EGW will need to adopt a whole-of-system strategy to addressing any future changes to the ADWG that include more stringent targets for DBPs. It is considered that such a change to the ADWG is unlikely within the next Water Plan period, and that EGW should use this period to better understand the source and mechanisms for DBPs in the MRWSS (refer to memo from AECOM (28 April 2011) entitled “Water Quality within EGW’s Water Supply Networks”).

4.3a


Previous cost estimates (Earth Tech, 2008) have been inflated accordingly and adopted ($6m CAPEX, $130k annual OPEX, $420k M&E refurbishment in Year 15). In addition a capital cost of $1.75m has been assumed for system augmentations to allow reverse flow between Sarsfield and Bairnsdale (OPEX $15k per annum). An additional $2.5m has also been included at year 10 for upgrade of treatment to include RO. This is assumed to be required to meet future changes in drinking water guidelines, which are expected to follow international standards and become more stringent with regard to DBPs. The inclusion of RO at year 10 allows for changes to the ADWG, which are reviewed on a five-year cycle, as well as a subsequent period of adjustment prior to compliance. It is also understood that a further cost will be incurred to recommission Toorloo Reservoir (particularly reinstating clay lining), though this is assumed to be offset by the avoided cost of otherwise disposing of this asset. The avoided cost of deferring capacity augmentation of the MSPL between Bairnsdale and Lakes Entrance has also been included in the NPC. It is acknowledged that the cost estimates are preliminary in nature, though the recovery of 450 ML storage implies a NPC of $19,100 per ML of storage).

2.8

4.3b

Socially Acceptable

This option provides for growth in Lakes Entrance and surrounds. It is possible the community may perceive a second WTP as wasteful, though this is not considered a significant risk if the reasons are made clear (and it is identified as optimal). Investigation may be required into refining a suitable location for the WTP such that it would have minimal impact on the surrounding community (assumed to be located at Toorloo). The health risk of increased DBPs has not been considered as it is

3.8


No

anticipated that proposed treatment process could meet ADWGs.

4.3c


A Toorloo WTP is not anticipated to involve major technical challenges, particularly with EGW’s recent experience in implementing the Woodglen WTP. However, the capacity to adequately prevent production of DBPs (associated with chlorine residuals and retention times) needs to be determined, particularly in relation to likely water quality guideline requirements in the future. Although likely to be perceived as inefficient and in conflict with industry trends, a Toorloo WTP does provide additional flexibility and capacity to respond during emergency and drought periods.

2.6

4.3d


A Toorloo WTP would impose additional energy requirements that, when considered alongside the initial treatment process at Woodglen WTP and pumping from the Mitchell River, would make water supply to Lakes Entrance relatively energy intensive. However, it would make use of a substantial existing asset.

3.0

4.3e

Politically Tenable

If demonstrated as optimal, a Toorloo WTP should be supported. However, there may be some resistance due to a perceived redundancy or inefficiency associated with the fact that water would be treated twice within the system. There is also some risk that the proposed WTP would be unable to meet future changes to drinking water quality standards that may require further reduction of DBPs.

3.0

4.4 Option 4 – Aquifer Storage and Recovery

EGW is anticipating securing an Aquifer Storage and Recovery (ASR) licence permitting injection and extraction of up to 500 ML per year at the Woodglen borefield. Trials and hydrogeological modelling suggest this volume could be increased to up to 1.2 GL with additional bores and injection under pressure (though this has been indicated to induce artesian conditions in neighbouring bores, which would need to be retrofitted to cater for the increased pressure). However, it is also evident that a maximum of 2.7 ML/d can be extracted before local aquifers draw down to a level that is unacceptable to other users. This presently constrains the extent to which ASR can be utilised, though REALM modelling indicates that implementing ASR when flows drop below 46 ML/d reduces additional storage requirements by approximately 400 ML.

4.4a


Capital costs are limited to any additional bores and connecting pipework and pumps. As injection is presently gravity fed, opex predominantly constitutes pumping for extraction, as well as maintenance of the bores to sustain efficient flowrates. REALM modelling indicates that (if triggered by flows in the Mitchell River of less than 46 ML/d), ASR reduces additional storage requirements by 400 ML. On this basis and assuming opex of approximately $50,000 per year, ASR has an optimal NPC of $3,100 per ML of avoided bulk storage.

4.6

4.4b

Socially Acceptable

ASR is recognised as innovative and appropriate, though communities are also often very sensitive about activities impacting on groundwater resources. Extensive monitoring requirements are imposed as ASR licence conditions to ensure there are no impacts on existing beneficial uses and groundwater levels in the aquifer. Ongoing investigation, community consultation and monitoring would therefore all be expected to be intrinsic to expanding ASR potential.

3.4

4.4c


Modelling and trials undertaken to date must be followed by ongoing monitoring to demonstrate the feasible ASR capacity. Though this is expected to take some years and involve extensive stakeholder consultation, EGW has successfully negotiated this

3.9


No

process to date. ASR represents an innovative, best practice approach that is sustainable and implemented with minimal major infrastructure.

4.4d


An ASR licence is conditional on conservative trials, investigations and monitoring to ensure there is no detrimental impact on groundwater resources. It is more likely, in fact, that ASR can have a beneficial impact by increasing groundwater levels that have declined over time. The pumping requirements for extraction are moderate and have associated energy and greenhouse implications.

4.1

4.4e

Politically Tenable

ASR is supported by Government as a key component of water supply systems in the future and as a means of maximising winter storage. EGW’s current trials are given specific mention in the Draft Gippsland Region Sustainable Water Strategy as a key storage approach for the future.

5.0

4.5 Option 5 – Desalination of brackish groundwater

The majority of the MRWSS service area (beyond the Woodglen borefield) lies within an Unincorporated Area for groundwater management. This means that additional licences are available, although the potential yield and quality is likely to be lower than that of the aquifers in the Wy Yung WSPA and the Stratford GMA. Should an aquifer with sufficient yields be identified, it is likely to have salinity levels above those recommended for drinking water. Brackish water desalination would therefore be required to remove salt. An initial desktop investigation indicates that there are a number of groundwater bores in the area east of Bairnsdale through to Lake Tyers, typically with salinities in the range of 1,000 mg/L to 3,000 mg/L. There is presently insufficient data to estimate aquifer yields, though it is expected that they are sufficiently high at many locations for irrigation purposes. Extraction from deeper aquifers may prove to be more economically feasible. A search of the SKM Groundwater Database should be the first stage of further investigation to obtain a full inventory of groundwater users and potential aquifer yields in the area of interest.

4.5a


Desalination has a high capital and operating cost, the latter associated with high energy requirements. With lower concentrations of salt, brackish water desalination requires less energy than seawater desalination and therefore should have a relatively lower cost. Depending on the location of the groundwater resource, this option could also reduce energy consumption elsewhere in the system by reducing the volume of water treated and pumped from Woodglen. Disposal of the brine waste stream can also be a significant challenge and cost, particularly if an ocean outfall is infeasible. Given the uncertainty surrounding the resource, high level cost estimates have been assumed for a 2 ML/d brackish water desalination plant of $5m although this cost could potentially be significantly higher. Assuming distribution at the eastern end of the system it is possible that this alternative supply could defer upgrade of the MSPL. On this basis this option has a comparatively higher NPC of $21,300 per equivalent ML of bulk storage.

1.6

4.5b

Socially Acceptable

Desalination is often poorly perceived due to its high energy requirements, while communities can also be sensitive to the potential for over-extraction of groundwater. However, desalination in this instance would utilise a resource that is otherwise unusable, with lower energy requirements than an equivalent seawater desalination plant. It would also provide for emergency response. On that basis it is considered

3.0


No

that this option may be generally acceptable to the community, though it may also be perceived as unnecessary while EGW has surplus surface water entitlement.

4.5c


Investigation would be required to identify an appropriate groundwater resource in an area otherwise considered to have none. A desalination plant can be readily procured, though consideration would need to be given to power supply and brine disposal in particular. For the latter, it is likely that an ocean outfall would be infeasible, and therefore evaporation ponds (which are unlikely to work optimally (if at all) in the East Gippsland climate) may be required, or even regular removal of the brine by truck.

2.8

4.5d


Investigation and monitoring would be required to demonstrate to natural resource managers that a suitable groundwater resource is available and can be harvested sustainably. Desalination has high energy requirements and therefore associated greenhouse gas emissions. Depending on chemicals used in the process, brine disposal also potentially constitutes a hazardous waste.

1.6

4.5e

Politically Tenable

Seawater desalination has been widely adopted in Australia and other water authorities have undertaken brackish groundwater desalination. Given these precedents, it is considered that there would be support for this option if it was identified as both feasible and optimal. There may be some social opposition (principally for environmental reasons) which translates to political doubt.

3.0

4.6 Option 6 – Demand management

Per capita demand has declined in recent years, attributed both to EGW’s improved waste minimisation and a response by customers to drought conditions. An increase in per capita demand as drought conditions ease would have significant implications for demand, particularly in scenarios of high population growth. EGW should continue to invest, where cost-effective, in waste minimisation to further reduce unaccounted water, as well as consider efforts to assist customers in continuing to optimise their water consumption.

4.6a


EGW has previously made significant progress towards government targets for demand management. While further efforts may initially provide additional water savings for comparatively minor investment, ongoing savings will be subject to the law of diminishing returns and be more difficult to achieve. It is challenging to determine a unit cost of demand management due to the complexity of implications for the system and their resulting economic impact. Marsden Jacobs (2007) determined a cost of between zero and $1.45 per kL of water saved by demand management, though it is acknowledged that this was based on water supply plans for four cities and should be expected to vary substantially between systems. Demand management can have a considerable financial benefit in deferring future supply augmentations, so further investigation may be warranted to investigate the cost-effectiveness of EGW expanding demand management in the future beyond current programs. As a minimum, EGW should continue to invest in waste minimisation where cost effective.

2.7

4.6b

Socially Acceptable

Recent drought conditions have forced both water authorities and the community to re-evaluate the way water is used in society. The government’s introduction of Permanent Water Saving measures (formerly enforced as part of staged water restrictions) further reflects the fact that water conservation is now a consideration in everyday behaviour. However, customers nonetheless have an expectation of water

2.6


No

authorities to provide sufficient supply to enable them to maintain all aspects of their lifestyle (including, for example, the right to be able to water a garden). While the community will therefore embrace water conservation to a degree, there is also a limit to which demand management can continue to be encouraged.

4.6c


A wide range of technologies is available to improve the efficiency of water use both indoor and outdoor, some of which will continue to evolve as appliances, in particular, become more water efficient in the future. Metering and leak detection technology can readily assist EGW in targeting areas of water loss, and improving technologies will make it more viable to reduce a greater proportion of these losses over time. However, it is also noted that leakage will naturally increase as infrastructure ages and therefore depends on the age profile of system assets. EGW’s program of asset renewal needs to account for this.

3.7

4.6d


A reduction in demand ultimately reduces the volume of water that must be taken from the environment, as well as energy used for treatment and distribution. Demand management is therefore optimal from the perspective of environmental responsibility.

4.7

4.6e

Politically Tenable

Water conservation is broadly encouraged by government and the water industry. EGW could expect to be supported in efforts to maintain an efficient and economic level of demand management.

3.0

4.7 Option 7 – Recycled Water

Supplying new growth areas in major centres such as Bairnsdale and Lakes Entrance with recycled water could offset potable demand and delay future supply augmentations. Since EGW have achieved 100% wastewater recycling since 2004, this opportunity would need to focus in particular on areas of new residential growth. There may be some instances where recycled water currently supplied for agricultural reuse can be diverted instead to large-volume customers for fit-for-purpose use that displaces potable consumption. However, these opportunities are presently expected to be limited and unlikely to constitute volumes that are significant enough to make a substantial difference the reliability of supply within the MRWSS as a whole.

4.7a


Recycling schemes require significant investment in treatment and delivery infrastructure. This will be reduced where existing assets can be utilised, but otherwise implies high costs for new Class A treatment plants and dual reticulation networks. As a cost comparison, upgrades of WWTPs to include Recycled Water Treatment Plants (RWTPs) totalling 5 ML/d capacity is assumed to cost $11m (including a recycled water distribution main). With an OPEX of $0.8/kL and M&E refurbishment of 1.5% of CAPEX, the NPC is estimated at $22,700 per ML of equivalent bulk storage.

1.7

4.7b

Socially Acceptable

Recycled water is now widely used and public perception has evolved accordingly. For non-potable, fit-for-purpose applications, it is expected that the community will be generally supportive of recycled water use. Benefits such as a secure supply of water for irrigation, particularly during water restrictions, are a key selling point for developments with dual reticulation. Irrigation of Bairnsdale Oval with recycled water has previously been identified as a project with good community benefits.

2.6


No

It is noted that use of recycled water for potable applications is currently contra to government policy and community expectations, and this option therefore does not provide emergency potable supply.

4.7c


Recycled water use is now reasonably common, though heavily regulated. Given the potential (and perceived) risks to human health, onerous treatment and monitoring requirements are imposed. While the technology is well understood, it is also constantly evolving and has an additional operational burden. Though recycled water represents a constant and secure supply source, it is only appropriate for non-potable applications.

3.2

4.7d


Recycled water use reduces discharges to the environment and provides an alternative supply of water that reduces stress on traditional sources. Lower quality recycled water (Class C) can be used for a range of uses where risk of human contact is limited (typically irrigation), though these generally provide less opportunity for potable displacement. Class A applications, including dual reticulation, enable more potable displacement, though increased treatment requirements have a high energy and associated greenhouse gas footprint.

3.3

4.7e

Politically Tenable

Recycled water use is endorsed by the Government in all major planning documents (Our Water Our Future; Sustainable Water Strategies). 5.0

4.8 Option 8 - Stormwater

Opportunities for stormwater harvesting can provide an alternative water resource whilst reducing discharge of nutrients to receiving waters. This is of particular benefit for the Gippsland Lakes, which suffer from high nutrient levels associated with rural and urban runoff. Stormwater harvesting is supported as best practice by State and Federal governments, which frequently provide funding resources for stormwater projects in recognition of the broader environmental and social benefits. EGW acknowledges the merit in investigating opportunities for stormwater recycling and the need to work with developers and local council to identify priority projects. It has been noted that redundant storage assets (including the decommissioned Wy Yung, Sarsfield and Toorloo storages) could be utilised for storage of stormwater flows, with small package plants to provide treatment. This concept warrants further investigation and discussion with stakeholders.

4.8a


Stormwater harvesting opportunities need to be assessed on a case by case basis and should be integrated with future residential developments. The additional benefits of stormwater harvesting – particular the reduction in discharge of nutrients – may present opportunities for external government funding. For cost comparisons, a hypothetical 1 ML/d scheme was assumed to constitute wetlands with subsequent treatment to non-potable quality (filtration and disinfection) at a cost of $2.5m. (Although stormwater can be treated to potable quality it is generally considered cost-prohibitive and has therefore not been assessed). As stormwater is a climate dependant source, it will have minimal impact on bulk storage requirements. Instead individual projects should be considered for their environmental benefits if sufficient funding can be acquired to make them financially feasible. The unit NPC for cost comparison was determined to be $26,100 per ML of equivalent

1.2


No

bulk storage.

4.8b

Socially Acceptable

Utilising stormwater for non-potable, fit-for-purpose applications is increasingly widespread and well accepted by a community that is aware of the need to optimise the way water resources are allocated. Integrated WSUD provides for improved amenity within new developments, reduces environmental discharges and makes use of an available water resource for non-potable applications.

3.0

4.8c


Cities such as Salisbury in South Australia and Orange in NSW have adopted stormwater as a major component of their water supply systems. Treatment options are well understood and continuing to evolve. However, the (comparatively) unpredictable and variable nature of stormwater means that large storages are often required to improve reliability of supply, which is generally lower than other alternative supplies.

3.4

4.8d


Harvesting stormwater can: reduce nutrient discharge; sustain new wetland systems with aesthetic, amenity and ecological benefits; reduce pumping requirements from other supply options; and provide additional supply to maintain parks and gardens during dry periods. Treatment has energy requirements with implications for greenhouse gas emissions.

3.9

4.8e

Politically Tenable

Stormwater harvesting is identified in many government strategies as a key opportunity for local government and water authorities to diversify and optimise water supply options. EGW can expect strong support for integrated water management that attempts to capture and use stormwater, with the possibility of external funding where additional benefits to the environment and community can be demonstrated.

5.0

4.9 Option 9 – Seawater desalination

Seawater desalination has become increasingly popular in Australia as a climate-independent component of most major cities’ water supply systems. The benefits of this secure supply typically need to be balanced with high energy costs and other environmental impacts.

4.9a


Desalination is a high cost water supply option and particularly sensitive to energy prices. Quoted cost estimates for desalination vary widely, reflecting a range of influencing factors: capacity, location, power supply availability, process, raw water delivery, brine discharge (particularly ocean outfalls), and treated water distribution. Invariably, energy is reported to constitute a large proportion (up to 50%) of whole-of-life costs. A 10 ML/d desalination plant (which modelling indicated may be required in the long-term) has been estimated to cost in the order of $35m, with assumed operating costs of $1.00/kL (Desalination in Queensland, GHD 2003). It is assumed that desalination would be at the eastern end of the system and therefore defer upgrade of the Woodglen WTP and MSPL. This results in an NPC of approximately $26,500 per equivalent ML of bulk storage.

1.0

4.9b

Socially Acceptable

The implementation of other desalination projects (particularly Melbourne’s Wonthaggi desalination plant) has increased community awareness about the technology, particularly focused on negative connotations associated with environmental impacts. While some sections of the public may appreciate the need for desalination as a climate-independent water supply, EGW could expect vocal opposition to any proposal

3.8


No

to implement desalination in the MRWSS. This is likely to be in the form of general (in principle) opposition from a broader section of the community, as well as more specific opposition from those potentially impacted (whether residing close to potential plant locations or users of the marine environment where brine discharges might occur). Desalination is a contentious issue that can be expected to polarise public opinion, particularly in a part of Victoria that is perceived as having relatively more natural water resources than the rest of the state. However, desalination is recognised as the only option that can provide a secure, climate-independent supply. As such, it is a long-term option of last resort that therefore also provides optimally for growth, meeting level of service and providing emergency response.

4.9c


Desalination is now widely adopted and well understood. Technologies are continuing to evolve and may in the future present alternatives that are more energy efficient than current (typically reverse osmosis) plants. The most challenging issue could be expected to be gaining regulatory approvals, which will require extensive work to select appropriate locations for infrastructure and to demonstrate that potential impacts on the marine environment (from brine discharges) are manageable. Consideration would also need to be given to offsetting greenhouse gas emissions (though a decrease in the volume of water pumped from Woodglen to Lakes Entrance may offset some increase in energy requirements).

3.2

4.9d


Desalination has high energy requirements that are expected to increase the greenhouse emissions associated with the MRWSS (though further investigation would be required to optimise the distribution of water from either end of the system and minimise pumping requirements). Although offsetting these emissions through certified programs or by the purchase of renewable energy has been undertaken elsewhere, there is uncertainty as to the effectiveness of these initiatives in mitigating a net increase in carbon or greenhouse emissions. However, a desalination plant supplying the eastern end of the MRWSS would mean a reduction in current transfer pumping requirements. Brine discharges can also have a potential impact on the marine environment unless appropriate mixing can be demonstrated. Selection of a site for discharges will be particularly contentious on a coast that is revered for its pristine nature, particularly within proximity of the Ninety-Mile Beach Marine Park.

1.6

4.9e

Politically Tenable

Both sides of government in Victoria have at various times espoused (or implemented) seawater desalination as a future component of water supply. However, given the escalating cost of Melbourne’s desalination plant and the controversy it has generated, it could be expected that a proposal for another desalination plant in Victoria may not be readily embraced by government. It is assumed that an irrefutable case for desalination as the only and optimal option would need to be made by EGW before it was considered by government agencies. Desalination is therefore considered appropriate only as a long-term option that can provide security of supply when alternative sources have been fully allocated.

3.0

5 Recommendations, Timing & Residual Risk (ensure linkage to Corporate Risk Register )

The ‘do nothing’ scenario has been excluded from the final MCA ranking process, on the basis that it would represent a failure on EGW’s part to adequately plan to meet its Level of Service obligations. While it is possible for EGW and its customers to agree for a lower level of service, this


requires consultation with the costumers which EGW undertakes during the preparation of its Water Plan. Due to the high degree of uncertainty surrounding some of the costs and the potentially for external funding for some options, a number of costing scenarios have been assessed as a sensitivity analysis of the final rankings. Three scenarios were assessed:

1. Demand management (for which no cost could be determined) prescribed the same cost as the lowest-cost storage option (Woodglen 3)

2. Demand management, recycled water and stormwater options each prescribed the mean cost of all options;

3. Demand management, recycled water and stormwater all prescribed the value for Woodglen 3 (as the lowest cost storage option), to reflect the possibility of external funding making up the deficit between their full cost and the cost of an optimal alternative.

Provisional results of the MCA assessment are as follows:

Rank Scenario 1 Score Scenario 2 Score Scenario 3 Score1 ASR 4.19 ASR 4.22 ASR 4.192 Woodglen 3 3.55 Woodglen 3 3.69 Woodglen 3 3.543 Demand Management 3.19 Stormwater 3.02 Stormwater 3.304 Toorloo WTP 2.75 Toorloo WTP 2.93 Demand Management 3.185 Recycled Water 2.63 Demand Management 2.89 Recycled Water 3.136 Stormwater 2.60 Recycled Water 2.84 Toorloo WTP 2.737 Brackish GW Desal 2.35 Brackish GW Desal 2.56 Brackish GW Desal 2.338 Desalination 2.28 Desalination 2.53 Desalination 2.25


In the short term to 2018, EGW would need to construct the equivalent of 850ML of additional bulk storage. It is recommended that EGW should:

Table 1 Short Term Recommendations

Recommendation Comment

Complete a new Master Plan for the system

To provide a holistic evaluation of the capacity, operation and security of the MRWSS. This would inform future bulk supply options assessments that will be completed as part of future updates of the WSDS or Water Plan assessments.

Implement ASR (to the maximum extent possible)

Investigate expansion of this scheme in beyond the current extraction limitations and capacity (ie. the pending licence for 500 ML/year)

Investigate site constraints at Woodglen

To confirm availability of suitable land and ground conditions at Woodglen in the event that ASR is unable to be expanded to meet short or long term storage requirements








Recommendation Comment Implement ASR (to the maximum extent possible)

Currently this is restricted to the equivalent of 150ML of storage by the extraction capacity of the existing bores and EGW’s existing licence of 500 ML per year

Construct Woodglen No.3 raw water storage

It assumed that remainder of the required storage volume (700ML) could be constructed at Woodglen.

Continue to implement demand management

Where cost effective as a means of deferring future supply augmentation requirements


Pursue external funding opportunities to defer and reduce the scale of future supply augmentations including desalination.



Update the 2003 ‘Blue Report’ or commission new Master Plan

To provide a holistic evaluation of the capacity, operation and security of the MRWSS. This would inform future updates of the WSDS or Water Plan assessments.

6 Itemised costings (incl. referencing)

A summary of the cost breakdown is provided below. See NPC worksheet for detailed cost breakdowns. The costs are high level estimates only (+50%/-30%) and should be confirmed during conceptual design for construction projects or at the proposal stage of planning studies.

Project Cost

Master Plan Allow $200,000 ASR Establishing ASR will incur additional operating

costs of between $100,000 and $150,000 per year, reducing over time to approximately $50,000 for proposed 500 ML/year scheme Allow $200,000 to undertake additional investigations to determine viability of expanding ASR to meet additional storage requirements



Demand management and leakage reduction

Dependant on extent of implementation

Investigate recycled water and stormwater

Allow $500,000 for initial desktop studies and funding applications

Complete initial desktop assessment of feasibility of desalination

Allow $50,000


7 Options Multi Criteria Assessment Summary

See weighting table spreadsheet

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