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Water Auctions and Sales

Water auctions are becoming more common across Southern Rural Water and can be a good way to gain access to extra water either for production or security.

Where can I find recent water auction or sales results?

The results of past auctions and water sales conducted through Southern Rural Water, are published on our auction results page here

 

Latrobe River Blue Rock drought reserve online auction

As part of the Gippsland Sustainable Water Strategy, a volume of water in the Blue Rock Reservoir is put aside for temporary allocation under the drought reserve. This water was made available in three auctions in early 2019 to licensed irrigators on the Latrobe River, downstream of Blue Rock Reservoir, for use to the end of 30 June 2019. The results are available on our water sales results page as above.

 

Opportunities to acquire new water entitlement in the Southern Rural Water area

New groundwater or surface water entitlements are available where the current licensed volume is lower than the specified limit. The preferred government policy is to release this water via a sales process, to ensure equity. The sale process is usually preceded by an application process to determine the level of demand.

The following principles guide the sales process:

  • Maximise availabilitywe will make water available as soon as possible, having regard to ease of provision and market conditions. This may involve a series of permanent (share) sales and temporary (allocation) sales in order to put the water into production.
  • Maximise the uptakewe seek to maximise the uptake by promoting sales and encouraging customer participation.
  • Fair market pricewater will be sold at a fair price, having regard to the costs associated in making the water available (e.g. cost associated with resource appraisals, validations and the sales process) and prevailing market conditions.
  • Fair and open processwe seek to sell the majority of the water via an open and competitive process (e.g. auction or tender), albeit with the ability to reserve some water for ‘off the shelf sales’.
System Method

Macalister Irrigation District

270ML High Reliability Water Share

135ML Low Reliability Water Share

100ML allocation

The water will be sold by auction with any residual then placed on the shelf for purchase at a price equivalent to the highest auction price.

In the event that no water is sold, the water will be placed on the shelf at the ‘reserve’ price.

This will continue our drive to achieve maximum water in production and assist customers to plan their water budgets.

It is planned to sell the water via auctions in Q2 and Q3 of 2019-20 (i.e. during the irrigation season).

Werribee and Bacchus Marsh Irrigation Districts

Up to 600ML Werribee

0ML Bacchus Marsh

(Validation of the water savings from the modernisation program will determine the volume of water shares that can be created.)

 

Water shares will be offered for sale via expressions of interest.  Any allocation from unsold water shares will be auctioned.

Expressions of interest for water shares will be sought from customers, with the price informed by recent auctions.

Any allocation accrued from unsold water shares would be auctioned towards the end of the season.

Timing is dependent on the completion of the water savings validation process and is anticipated to be Q3.

 

Unregulated:

Tambo River – 1,500ML

Mitchell River – up to 6,000ML

 

In accordance with government requirements, we will:

  • advertise the availability of the water and seek applications for licences (or amendments to existing licences) to access the water
  • assess the applications.

In the event that the demand exceeds supply, SRW will auction the water with any residual then place it on the shelf for purchase at a price equivalent to the highest auction price.

In the event that demand is less than that available, SRW will offer to sell the water to applicants at the reserve price.

It is planned to sell the Tambo water by the end of Q3 of 2019-20.

There are a number of challenges associated with the timing of the Mitchell sales, which could restrict our ability to achieve the sales in 2019-20.

(Possible future sale)

Otway Lower Aquifer

 

An expression of interest for the Otway Lower Aquifer identified significant demand for new entitlement. Initially this has focused on water sales in the area to the north of Warrnambool with 5,000 ML identified for sale and applications received for this amount. The 5,000 ML will be sold via auction.

(Possible future sale)

Moe GMA

 

A Groundwater Resource Appraisal identified that 4,407ML is available in the Moe GMA. The demand is unknown. We plan to review the Moe groundwater local management plan and to assess the overall demand, before deciding on the feasibility of undertaking a sale in 2019-20 or 2020-21.

The map below (‘Water Sales Map 19-20’) shows the location and volume of planned sales of groundwater and surface water entitlement for 2019-20.

Water Sales

There are additional potential areas where future sales of entitlement may occur (after June 2020). Some of these areas are shown on the attached map ‘Future Potential Water Sales’.

Potential Sales