Priority 4

Use best available data, methods and modelling to inform decisions across the water sector

Until now, our water management decisions have been made on just 130 years of observed climate records. The NSW Government is investing in new, state-of-the-art climate data and modelling that brings together information from a variety of sources to improve our understanding of past climate conditions and plausible climate futures.

This new modelling, which is being adopted as part of the development of the regional and metropolitan water strategies, will provide a more accurate picture of the frequency, duration and magnitude of extreme climate events such as extended droughts and floods, and indicate plausible, more extreme scenarios that may emerge over the next 40 years due to climate change.

NSW’s climate is affected by almost all the major weather and climate drivers on the Australian continent at some stage through each year.

East coast lows (ECLs) and the major oceanic climate drivers - El Niño-Southern Oscillation (ENSO), the Interdecadal Pacific Oscillation (IPO), the Southern Annular Mode (SAM) and the Indian Ocean Dipole (IOD)—all interact over NSW, producing a highly variable climate from year to year and between seasons.

Figure 18 shows the various climate drivers influencing rainfall in Australia and Figure 19 shows the relative influence of these climate drivers in different parts of NSW. The complex effects of these climate drivers result in the extended periods of wet and dry that NSW experiences.

This new climate data is now being used in river system models to compare the outcomes of water-related policy, planning and/or infrastructure options. This enables us to test how effective different options—such as a pipe, dam or change in a rule or policy - might be in extreme scenarios, compared to other options.

The overall message from the new modelling is that our water supplies in NSW could be less secure than we thought. This is because we have now factored in that droughts longer than those of the last 130 years are likely at some point and that we could see higher temperatures, higher rates of evaporation and less rainfall - leading potentially to reduced river flows and more frequent low flow periods, decreased inflows into dams and water storages, and lower water storage levels.

This data has been used to investigate potential climate impacts in a number of locations across NSW and will be presented for each region as part of the regional and metropolitan water strategies. Figures 21 and 22 show examples of how this new modelling is being used to explore potential impacts in the Macquarie and Far North Coast regions.

Update water allocation frameworks in response to changing water availability

Our improved data and modelling provides an opportunity to review the frameworks around water allocations - given our fuller understanding of the level of risk faced by different water users under current arrangements, as well as under more extreme but possible future climate conditions.

Licence holders in NSW regulated rivers are allocated water at the start of each water year and throughout the year if it rains and there are inflows to dams. The volume they are allocated is a proportion of their entitlement.

Water managers consider several factors when decisions are made about how much water to allocate to different categories of licences. These include dam storage levels and how much of this available water is already committed to the environment or is being held as carried over water in the accounts of licence holders (unused from previous years) or will be needed for the future requirements of high-priority needs such as towns, domestic and stock supplies. Water managers also consider how much water is needed for high security licences and interstate water delivery, as well as the volumes needed to deliver water down the river to meet these commitments.

When assessing the available water, an assumption is made about how much water will flow into the dam during a water year. This means that water managers have to take a level of risk at the beginning of the water year (which starts each year on 1 July) that these inflows will occur during the year to supply the allocations. Essentially, water allocations are a risk-based balance between providing water for productive use versus increasing reserves in storage to quarantine more water to improve water security in future years.

After the Millennium Drought, NSW opted not to take a more conservative approach to its water allocations to improve water security for critical needs in the event of a future severe drought. Rather, in the event of the next drought, it was preferred to use other emergency drought mitigation measures to support communities. These include carting water for some domestic uses and restricting access to carryover water in general security licence accounts to meet higher priority needs.

In the wake of the recent drought, there are again calls to reduce water allocations to mitigate the impact of future droughts - that is, to be more conservative in how much water is allocated over a particular period to keep more water in reserve. However, this could potentially have a cost to productivity across non-drought years.

Current environmental water settings may also need to be reviewed to determine their suitability to protect and maintain environmental functions under changing climate conditions.

Water allocations are not the only tool for improving water supply reliability and security. Improved water reliability and security for towns and industries will be influenced by the combination of water availability, how the available water is allocated, river operations, infrastructure, demand management and water efficiency options.

Our new understanding of plausible future climate scenarios means it is appropriate to review water allocation approaches in each valley, in consultation with communities, to strike an acceptable balance between standards of water supply security for critical human and non-human needs during severe water shortages and optimal access to water when available for productive use.

Using the new, extended climate data records, we can look at water security needs across regions to identify potential climatic (drought) extremes and consider opportunities to improve water security for drought years, while aiming to limit the reduction to water allocations in other years. In some valleys, this may trigger a need to change water sharing plan rules and water allocations in response to new extremes in water availability.

Improve drought planning and preparedness

At the beginning of 2020, 100% of NSW was in drought.

While the Millennium Drought (2002-2009) was a new drought-of-record for the southern Murray-Darling Basin (the Lachlan valley and south), the recent drought (2017-19) became the new drought-of-record in northern Basin valleys - in some places far worse than previously experienced. In the Macquarie valley for example, inflows were one-third of the previous record low inflow based on over 100 years of data.

It also represented the lowest inflows on record in Greater Sydney by a significant margin and depletion rates were 1.5 times what they were during the Millennium Drought.

In October 2018, the Department of Planning, Industry and Environment released the NSW Extreme Events Policy, which establishes the principles for managing extreme events in the NSW Murray-Darling Basin. The policy is supported by Incident Response Guides for each major water source. The policy and guides establish a staged approach and provide a range of measures for water managers to deploy as conditions deteriorate. During the current drought, the stages became a key way to signal worsening water availability conditions to water users and the measures that could be applied to protect critical town water supplies. The stages apply to surface water shortages, groundwater shortages and water quality events.

Water sharing arrangements between Basin jurisdictions are set out in the Murray-Darling Basin Agreement, which provides limited adaptability or flexibility to respond to climatic extremes. Regardless of inflows into the system and available water in the system, NSW is required to contribute half of the entitlement flow to South Australia and then allocate remaining water to NSW water users. A review of the Murray-Darling Basin Agreement should be undertaken to identify mechanisms for greater flexibility and cooperation between jurisdictions experiencing different levels of drought.

Definitions of town water restrictions can vary considerably across NSW. For example, level 2 water restrictions in Bathurst can indicate a very different level of restrictions to level 2 restrictions in another town. As the drought extended across NSW, the differences between these approaches created some confusion and uncertainty, with neighbouring towns in the same valleys adopting differing levels of restrictions in their water use.

It may not be appropriate or possible to mandate the same definitions, gradings and permitted activities under different restrictions for every city and town in NSW. However, common principles may help achieve greater clarity and consistency.

Better integrate water policy with other planning frameworks

Future water reliability and security in a changing climate will be central to land use and urban development planning decisions and industry development initiatives in regional NSW. There is an opportunity to consider water availability and impacts much earlier and more strategically through the planning system.

How land is used determines water management needs, whether water is servicing urban development or being provided for household use, agricultural production, mining, food processing and manufacturing, amenity, healthy ecosystems, cultural use or recreational use. It makes little sense to locate water intensive uses in areas with little access to water or where supplies are highly vulnerable - unless also giving broader consideration of infrastructure and supply needs.

In NSW, multiple government agencies work together under a range of legislation to ensure the impacts of major developments on water resources are properly understood and regulated.

There is a need to better link approvals for land use with approvals for access to finite and variable water resources, and to ensure that compliance is monitored and enforced. Giving consideration in the early planning phases to extraction caps, constraints, reliability of supply and market conditions reduces investment risk. It may also assist in establishing more streamlined planning approvals processes.

In addition to water availability for future development, land use planning must also link more effectively with broader issues of water quality and ecosystem health, and better recognise opportunities to integrate water supply, stormwater management and wastewater management.

For example, the Parramatta River Master Plan is guiding draft planning reforms to create a living river which include short-term recommendations to update local land use planning controls to align with objectives of the Master Plan which will reduce stormwater runoff and increase landscaped areas, improve waterways and riparian corridors, include stormwater management and water sensitive urban design provisions and review foreshore development to support waterway health.