Home | What happens to water pricing in a wet year?

What happens to water pricing in a wet year?

When the Bureau of Meteorology predicted a wetter than average spring for pats of eastern and southern Australia, they compared it to the 2016-17 season. So, let's take a look at what occurred in a comparative wet season.

In September 2016 the Hume Dam was at 96% capacity, reaching 99% by November.

In the last week of September 2021 the Hume Dam sits at 98% with total releases to date close to 421 gigalitres since the beginning of the month. The Murray-Darling Basin Authority has announced releases to be stepped up from Friday 24 September ahead of what is expected to be a sustained wet–weather event spanning several days from Wednesday. Above–average rainfall is expected in the upper Murray catchment in late September and October and there is an increased chance of flooding, particularly on the floodplains between Hume Dam and Yarrawonga Weir.

The weather outlook for October is wetter than average and October is historically one of the highest inflow months.

In 2016 the Murrumbidgee Inter Valley Trade (IVT) remained closed due to excess water in the Murray system. In 2021 the IVT is currently closed and only likely to open if temporary prices in the Murrumbidgee exceed prices in the Murray.

On 15 September 2016, NSW 11 general security allocations were at 42% increasing to 53% on 4 October. In September 2021, general security allocations are at 44% of entitlement for this water year and total general security water availability, incorporating carryover is approximately 87% of entitlement or 88,000 megalitres, compared to 84,000 megalitres in 2016.

Temporary trades were as low as $48 per megalitre by February 2017.

Victoria Murray seasonal determinations started at 61% of high-reliability water shares in September 2016 and were at 100% by October. In September 2021, high-reliability water shares in the Murray system are at 77% with a total of 740,059 megalitres of available water.

Waterfind charts below show the downward trend of temporary water trading prices in 2016-17 across South Australian Class 3 licences, Victoria Zone 7 high reliability and NSW Zone 11 general security. In September 2016, temporary prices were at $141 per megalitre but dropped by approximately $45 per megalitre between September and December and were trading as low as $48 per megalitre by February 2017.

In September 2021, temporary trades in the Murray system started at an average price of $145 per megalitre and have dropped to $125 per megalitre by the end of the month.

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