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Focus: Melbourne's future water supply

19 June 2009

In brief: The Victorian Parliamentary Environment and Natural Resources Committee has recently released its report on options for supplementing Melbourne's water supply, Inquiry into Melbourne's Future Water Supply (June 2009). Senior Associate Kate Axup reports on the key recommendations of the committee.

How does it affect you?

  • It is evident both from the committee's terms of reference and the context in which the review was commissioned that its focus was to be on options for smaller scale augmentations of Melbourne's water supply.
  • The committee's findings and recommendations raise a number of possibilities for investors and water sector participants in terms of future water infrastructure projects.
  • The clarification and improvement of the regulatory environment affecting such projects, such as the issue of stormwater ownership and sewer mining rights, is an important step in order to promote these types of augmentation projects.


The security of Melbourne's water supply is a topic that is attracting a great deal of attention from government, the media and the public. With a number of major augmentation projects at various stages of planning and construction, water storages at historically low levels and consumers facing the prospect of water bills doubling in the short term, Melburnians are focused as never before on water.

In September 2007, the Legislative Council directed the Victorian Parliamentary Environment and Natural Resources Committee to inquire and report on the relative merits of supplementing Melbourne's water supply by some or all of the following means:

  • further water savings achieved through increased conservation and efficiency;
  • stormwater collection;
  • the reuse of treated wastewater;
  • the use of groundwater;
  • small locally based desalination plants; and
  • any other optional water source considered appropriate by the committee.

The committee's terms of reference were issued shortly after the Victorian Government released Our Water Our Future: The Next Stage of the Government's Water Plan in July 2007. This constituted the Government's announcement of the major augmentation projects currently underway, including the Wonthaggi desalination project, the Sugarloaf pipeline and the Food Bowl Modernisation Project.

The committee's findings and recommendations cover each of the terms of reference described above.

Key findings and recommendations

In its report, the committee makes a total of 48 recommendations for the possible augmentation measures described above. This article will focus on the recommendations made in relation to stormwater, recycled water and sewer mining.

A strong theme running through the report is that water conservation and efficiency should be maintained as the top priorities in water management. In this respect, the committee recommends the expansion of current funding, programs and initiatives (such as behavioural change programs and water pricing initiatives) and the development of a strategy for the continuation of conservation measures to counteract the potential increase in consumption that may occur once the major augmentation projects are brought on-line. At a practical level, the committee recommends that:

  • simple low-cost water-efficient fixtures, such as showerheads and dual-flush toilets, become mandatory for existing houses and non-residential properties at the point of sale or lease; and
  • an environmental sustainability assessment and rating system, including water efficiency, be established and applied to all new, altered and existing homes and non-residential buildings at the point of occupation, sale or lease.

In terms of water pricing, the committee recommends that the pricing structure for water should move towards a higher proportion of a water bill being allocated to consumption and a lower reliance on fixed charges. In addition, the committee recommends that consumption charges should responsibly be increased to reflect the full environmental, social and economic costs of water.

The committee concluded that there is a limited role for small-scale, locally based desalination plants in Melbourne, largely due to constraints around the disposal of effluent into Port Phillip Bay.1

Stormwater collection

The report notes that Stormwater Victoria (formerly the Stormwater Industry Association Victoria) has estimated that between 400 and 550 gigalitres of stormwater runs off Melbourne's urban catchment annually. This is a similar or greater volume than Melbourne's total annual mains water use.
In the face of such an abundant water resource, very little stormwater harvesting is currently being undertaken in Melbourne. In fact, one estimate puts the quantity at less than 0.25 per cent of the available resource.

Harvested stormwater can be used for a wide range of purposes, including potable water substitution, where treated stormwater is used to water golf courses, sporting grounds and parks, and industrial uses. Accordingly, the existence of such a significant potential water resource raises an interesting possibility for investors and water sector participants.

Challenges involved in the collection and re-use of stormwater include the quality of stormwater, which often contains pollution and other contaminants, and the requirement for storage systems so that the water can be kept for use in drier periods. The report notes that smaller-scale or 'local' schemes are often best equipped to address these challenges, as the local collection and storage of stormwater reduces contaminant risk and infrastructure and transport costs. The most obvious example of such a scheme (on a very small scale) is the growing use of domestic rainwater tanks.

A number of decentralised stormwater harvesting and reuse projects exist in Melbourne. Each of these captures and reuses stormwater within a local area. These include projects at Albert Park Lake, the Royal Park wetlands and in Box Hill.

The report notes that the primary barrier to the wider uptake of stormwater harvesting in Melbourne is not predominantly technical. Instead, the barriers include cost and the current planning and policy environment. In particular, the committee recommends that:

  • the Victorian Government issue its (delayed) statewide urban stormwater strategy as soon as possible, in order to improve regulatory certainty around ownership of stormwater and allocation issues; and
  • Victorian planning provisions be improved and extended to promote stormwater harvesting.

Recycled water

In 2002, the Victorian Government set a target to recycle 20 per cent of sewage inflows at the Eastern and Western Treatment Plants by 2010. Both treatment plants, which together treat around 94 per cent of Melbourne's sewage, currently undertake significant, large-scale recycling operations. This target has already been reached, with 23 per cent of inflows recycled in 2007-08.

The report highlights the potential for use of the increased quantities of recycled wastewater that will become available as a result of the forthcoming upgrade to the Eastern Treatment Plant. The report notes that, depending on the level to which it is treated, recycled wastewater can be used for irrigation, dual-pipe systems in residential developments, environmental flows in the Yarra River and, potentially, in connection with power generation in the Latrobe Valley. Of course, the effect of such usage is to conserve supplies of potable water.

The committee's key recommendations for wastewater recycling are that the Victorian Government:

  • establish new recycling and reuse targets (50 per cent by 2012 and 70 per cent by 2015); and
  • mandate dual pipe systems in new residential and industrial developments and, where practicable, encourage the installation of such systems in existing residential and non-residential areas which are located close to wastewater treatment plants.

The committee found that the application of treated wastewater for indirect potable reuse is not currently required to augment Melbourne's water supplies. Indirect potable reuse involves the addition of recycled wastewater to dams and reservoirs so that it forms part of a city's potable water supplies.

Sewer mining

Sewer mining is a form of decentralised wastewater recycling. It involves tapping into a sewer, extracting sewage and treating the sewage for reuse. Possible reuses for recycled water derived from sewer mining are similar to those described above, but would generally be applied on a smaller scale.

Sewer mining involves a number of challenges. These include the high energy requirements and greenhouse gas emissions associated with the treatment process and cost inefficiencies associated with smaller operations.

A number of sewer mining projects and trials have been undertaken in Melbourne, including a plant at Flemington Racecourse and a system installed at the City of Melbourne's offices. This system supplies all of the building's non-drinking water for toilet flushing, cooling and irrigation.

The committee recommends that guidelines to facilitate sewer mining projects be developed by Melbourne Water and the metropolitan water retailers and that the Victorian Government should continue to promote the development of sewer mining projects as a decentralised wastewater treatment option.


In the context of the major capital works program currently being undertaken by the Victorian Government in the water sector, the committee's report raises a number of possibilities for smaller scale water infrastructure and augmentation projects, as well as further opportunities in the water efficiency space. While still potentially making a significant contribution to the security of Melbourne's future water supply, the scale of these projects and programs is such that they are more appropriate for private sector involvement.

The clarification and improvement of the regulatory environment affecting such projects, such as the issues of stormwater ownership, sewer mining rights and planning constraints, is an important step in order to promote these types of augmentation projects. We will be monitoring the progress of the Victorian Government and the metropolitan water authorities in this respect.

  1. The committee defined a small desalination plant as one that produces between 110 and 180 megalitres of water annually. By contrast, the proposed desalination plant at Wonthaggi will have an initial capacity of 150 gigalitres.

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