Annual water allocation trading strategy released

The Victorian Environmental Water Holder has released its water allocation trading strategy for northern and western Victoria for 2015-16.

Annual environmental water trading strategy released

The Victorian Environmental Water Holder has released its water allocation trading strategy for northern and western Victoria for 2015-16.

The strategy provides transparent information to other market participants about how and why environmental water might be traded to support Victoria's rivers and wetlands and the wildlife that depends on them.

The VEWH – the independent statewide body which prioritises environmental watering across Victoria – uses both trade and carryover to move water to where it is needed, when it is needed, for the best environmental benefit for the state.

With low inflows forecast for 2015-16, alongside potentially drier El Nino conditions, the VEWH's Chairperson, Denis Flett, said that carryover is a vital tool for protecting river and wetland environments.

"Environmental water carried over from last year will be used to bolster short supplies in most regions in 2015-16," he said.

"If dry conditions continue in western and northern Victoria, environmental watering objectives will be scaled back to focus on avoiding irreversible loss and providing refuges for wildlife, including threatened species."

"The majority of trade will be administrative transfers, moving water between environmental water accounts, to enable flexibility in where and when it is delivered."

Mr Flett said that commercial trade has been a small but important part of the VEWH's water market activity. Last year the VEWH bought just 629 ML in Melbourne and sold 12,475 ML in northern Victoria.

"The decision to buy – or sell in wetter systems – in 2015-16 will depend on unfolding seasonal conditions and watering demands through to 2017.

"Water allocation purchase will be considered together with efficiency measures, such as environmental water reuse," Mr Flett said. "If purchase is required, the total amount is likely to be less than 1,000 ML in northern Victoria and less than 10,000 ML in western Victoria.

"Water allocation sales will be considered in systems where foreseeable environmental water demands are able to be met, or where revenue from the sale would enable environmental outcomes to be maximised," he said. "In the past, water sales have been between 10,000 ML and 14,000 ML, and have occurred from December onwards after peak environmental water demands in spring have passed."

The VEWH's water market activity is managed carefully to avoid impacts on other water users.

"The VEWH is subject to the same water trading rules as other market participants," Mr Flett said.

"However, we take extra care to plan our market activity to minimise any adverse impacts on water markets and other entitlement holders."For further details, read the VEWH'sWater Allocation Trading Strategy 2015-16