New report assesses the economic value of water in storage in Victoria

The Melbourne School of Engineering’s Department of Infrastructure Engineering has published their report The economic value of water in storage.

This report establishes the economic value of water in storage in Melbourne’s supply system. It does so by examining the costs associated with maintaining a reliable water supply over a twenty-year timeframe. Calculating this cost over a range of initial storages generates the Reliability Cost Curve (RCC) for Melbourne, which in turn, shows how the value of water in storage changes at different levels of storage. Knowing the value of water in storage is critical for a range of important issues confronting Melbourne’s water supply authorities. These include: 

  • Water trading, particularly at what price to buy or sell water
  • Quantifying the water security benefits of Integrated Water Management and local scale investments in efficiency
  • Informing the operation of the desalination plant, or other climate independent water supply sources
  • Determining the real option value of forward planning

Download the report: The economic value of water in storage [PDF]

Project team

The University of Melbourne project team consisted of:

  • Professor Andrew Western, Infrastructure Engineering, University of Melbourne
  • Professor John Langford, Steering Committee Chair, University of Melbourne
  • Nathan Taylor, Research Fellow, University of Melbourne

Steering Committee

The project was informed by the members of the Steering Committee consisting of:

  • Richard Smith, Business Planning and Regulation Manager, City West Water
  • Udaya Kularathna, Team Leader Water Resource Assessment, Integrated Planning, Melbourne Water
  • Bruce Rhodes, Manager Water Resources Management, Melbourne Water
  • Ian Johnson, Manager Urban Water Policy, South East Water
  • Dominic Keary, ESC Project Manager, Yarra Valley Water
  • Stephen Sonnenberg, Manager Urban Water Security Policy, Department of Environment, Land, Water & Planning

More information

Professor Andrew Western
Telephone: +61 3 8344 7305