What are LTDLE factors?

Long-term diversion limit equivalent (LTDLE) factors across the Basin were noted by the Murray-Darling Basin Ministerial Council in 2011, to account for the environmental water recovery associated with the development of the Basin Plan, these are commonly known as the Cap factors.

The LTDLE factors are a water accounting tool used by Murray-Darling Basin Authority (MDBA) and Department of Agriculture (DoA) to measure how much water has been recovered for the environment as part of the Murray-Darling Basin Plan and to guide future water recovery decisions.

LTDLE factors provide a conversion between the size of a water entitlement and the long-term average use of the entitlement over the timeframe used to develop the Basin Plan.

LTDLE factors represent the long-term average annual usage of an entitlement by considering the average allocation and utilisation of the entitlement.

LTDLE factors are only intended to estimate the long-term average environmental water recovery of entitlements. They are not intended for determining the financial value of an entitlement. Revision of LTDLE factors will not affect reliability as it does not influence the seasonal determination process.

Why do we need LTDLE factors?

There are over 150 different classes of water entitlements across the Murray–Darling Basin.

To allow the Murray-Darling Basin Authority (MDBA) to report on water recovery in a way that is consistent and accurate across the Basin, each valley’s entitlement classes are given an LTDLE factor to translate through to long term average use, so they can be counted on equal terms.

The factors provide a consistent accounting system to ensure water recovery has occurred as planned and indicate where any future water recovery may be required.

How do the LTDLE factors work?

The factors are a numerical value (from 0.0 to 1.0) assigned to each entitlement class that reflects estimates of the long-term average actual water use.

This is different to the reliability of an entitlement, which considers water availability.

These factors are focused on historical patterns, they are not a prediction or a guide of future water use.

The factors have no impact on entitlements or water availability.

Reviewing and updating the LTDLE factors

In 2015, all Basin Governments committed to reviewing the methodology and the assumptions used to develop the first set of factors in response to concerns that the methodology used was not as accurate as it could be and not consistent across the Basin.

Victoria worked with the MDBA to review and update the Victorian LTDLE factors and developed revised factors using the best available models and data. This work ensures the LTDLE factors give the best representation of water recovered in Victoria under the Basin Plan.

A Long-Term Diversion Limit Equivalent Factor revision technical summary report (DOCX, 296.0 KB) was submitted to the MDBA in 2018. An Independent Review Panel engaged by the MDBA in January 2019 to review Victoria’s LTDLE factors concluded its review in March 2019 and endorsed Victoria’s revised LTDLE factors. The Panel also concluded that the method and assumptions upon which these factors are based – which includes use of Victoria’s Baseline Diversion Limit (BDL) models – is the best available at the current time.

What are the revised LTDLE factors in Victoria?

The revised factors are listed in the table below:

SDL Resource Unit

Entitlement class

LTDLE Factor Versions

Original (2011)

Revised

Broken

High reliability

0.950

0.570

Low reliability

0.767

0.083

Campaspe

High reliability

0.950

0.950

Low reliability

0.490

0.571

Goulburn

High reliability

0.950

0.967

Low reliability

0.350

0.583

Loddon

High reliability

0.950

0.624

Low reliability

0.270

0.050

Vic Murray

High reliability

0.950

0.974

Low reliability

0.240

0.543

Wimmera-Mallee

Irrigation Product including Losses

0.806

0.828

Ovens

Regulated irrigation

0.950

0.450

Methodology used to derive the revised factors were endorsed in an MDBA commissioned independent review. The resulting factors were agreed to by the MDBA who is satisfied that the updated factors are robust, and evidence based. They have been peer-reviewed and are the outcome of a thorough process.

Original factors were those published by Department of Sustainability, Environment, Water, Population and Communities in 2011 and were used in Victoria to calculate recoveries from purchases. There are also factors used specifically for GMW Connections.

Frequently asked questions

LTDLE factors for Low Reliability Water Shares (LRWS) for Goulburn and VIC Murray are 0.583 and 0.543 respectively. Why are the LRWS factors so high - especially considering that there has been negligible LRWS allocation in these basins recently?

LTDLE factors are calculated over the period from 1895-2009, which is on average, a wetter period compared to recent years. This historical period is also the period in which the Baseline Diversion Limit (BDL), Sustainable Diversion Limit (SDL), and water recovery targets are calculated.

The factors are not based on the unusual water demand patterns following the break of prolonged Millennium Drought during the early stages of settling into the current carryover rules.

These unusual water demand patterns have not been observed in recent years, but if it does reoccur, its impact – particularly to low reliability water share allocation is likely to be minimised by Victoria’s current carryover policy.

Why are LTDLE factors for smaller valleys lower than larger valleys?

LTDLE factors do not just reflect availability - they also reflect how much water is used. The average use of available water in the smaller valleys are relatively low compared to larger valleys with irrigation areas. This is why the LTDLE factors for smaller valleys are low.

Will this change the value of my water shares in the market?

No. LTDLE factors are only intended to estimate the long-term average environmental water recovery of entitlements. They are not intended for determining the financial value of an entitlement.

Will this change my allocations in the future?

No. Revision of LTDLE factors will not affect reliability as it does not influence the seasonal determination process. In fact, the revision of LTDLE factors is intended to protect reliability by preventing over / under recovery and the overissue of water shares from water savings projects.

Page last updated: 14/11/19