Desalination is critical for Melbourne to ensure communities and businesses have the water we need and so we can avoid severe water restrictions. Melbourne’s diverse water supply measures are managed to make sure our system is reliable and less reliant on rainfall. This means we can better withstand dry years, drought, fires and climate change as well as meet the needs of a rapidly growing population. Victoria’s desalinated water is produced at the Wonthaggi plant, where reverse osmosis technology is used to separate salt from seawater to create high quality drinking water.

Read the desalination essentials including the flow-on costs to customers, or click through on the tiles for more detailed information about desalination.

Desalination essentials

Water Production

On 1 April 2022, the Minister for Water announced a 15 GL water order for 2022-23.  Delivery of 2022-23 15 GL water order is anticipated to commence during July 2022.

Delivery of 2021-22 125 GL water order commenced on 1 July 2021 and the plant has already delivered 110 GL of desalinated water to Melbourne Water, South Gippsland Water and Westernport Water.

This is additional to the 326.1 GL (18.0 per cent of total Melbourne Water storage volume) delivered over the 2016-17, 2017-18, 2018-19, 2019-20 and 2020-21 supply periods and 23.9 GL (1.3 per cent of Melbourne Water storage volume) delivered during commissioning in 2012.

Water orders

Each year the government places an order for how much water is required to be produced by the desalination plant. Flexible water orders can be made from 0 to 150 gigalitres (in set increments) to suit different needs each year. The following table shows the orders that have been made for desalinated water since 2016-17.

Supply PeriodYearVolume of Desalinated water ordered
SP52016-1750 GL
SP62017-1815GL
SP72018-1915GL
SP82019-20125GL
SP92020-21125GL
SP102021-22125GL
SP112022-2315GL

On 1 April 2022, the Victorian Government announced an order of 15 GL of water from the desalination plant for the 2022-23 supply year to boost water storages.

Regular desalinated water orders from the Victorian Desalination Plant are an integral part of Melbourne’s drinking water supply. On average Melbourne uses over 50 GL more water every year than what flows into our storages.

Despite the wet summer, La Niña brought us this year, over recent decades we have seen warmer and drier seasonal conditions in Victoria. While individual seasons or years may see high rainfall, the longer-term trend of warmer and drier conditions is expected to continue meaning we need to continue diversifying our water supply.

Desalinated water supplements Victoria’s catchments and ensures an adequate buffer to secure our supply in the event of severe drought. Desalinated water also takes the pressure off our reservoirs during drier periods and droughts.

As droughts become more frequent and prolonged, desalinated water will safeguard our quality of life and economic prosperity.

Typical household bills will remain stable in 2022-23 due to the 15 GL water order.

Bills will be around $27 lower than they would have been if we had made a similar order to last year’s order of 125GL. However, other adjustments to prices such as CPI mean that overall typical bills will be stable.

Melbourne’s water bills are amongst the lowest in Australia and a smaller order when storages are high helps keep them low. For customers in Melbourne, a typical household water bill in 2020-21 was $1022 which is equal to Sydney, $76 below Adelaide, $78 below Canberra, $481 below South-East Queensland, $576 below Perth and $809 below Darwin.

The Victorian Government has also minimised costs by refinancing the Desalination Plant in 2019 and achieving savings of $928 million.

The cost of a 15 billion-litre water order for 2022-23 is around $11 million.

On 31 March 2021, the Victorian Government announced an order of 125 GL of water from the desalination plant for the 2021-22 supply year to boost water storage.

This order is the same size as the orders for 2019-20 and 2020-21 which were the largest ever and is necessary to prevent Melbourne’s water storage from dropping to a point where they pose a significant risk to water security.

The Victorian Government worked hard to minimise the cost to households of this water order.

On average, Melbourne water bills (residential and business) in 2021-22 should be lower than in 2020-21. A typical average household bill in Melbourne is expected to fall by around $33. Victorians continue to have some of the lowest water bills in the country, with households benefiting from flat or falling water prices.

The BoM National Performance Report for 2020-21 found that typical Melbourne household bills were the same as Sydney and cheaper than Adelaide by $76, Canberra by $78, south east Queensland by $481 and Perth by $576.

The Victorian Government has also minimised costs by refinancing the Desalination Plant in 2019 and achieving savings of $928 million.

The cost of a 125 billion-litre water order for 2021-22 is around $77 million.

If the full cost was passed on to metropolitan Melbourne customers, the average impact of a 125 GL desalination water order in 2021-22 on residential customer bills in Melbourne would be about $30 per annum (calculated on a typical bill of 150KL).

The 125 GL order will supply over a quarter of Melbourne’s average annual water use, helping to avoid future supply risks and water restrictions.

Over the coming decades, climate change projections for Victoria show an increased risk of extreme weather, heatwaves, bushfire weather, less rainfall overall, and a reduction in river flows.

Melbourne has experienced below long-term average inflows into our storage in 16 of the past 20 calendar years and we are forecasting a deficit between the amount that can be captured in our dams and water demand for greater Melbourne of more than 50 GL per year.

Our largest reservoir, the Thomson Dam, has not been full since 1996.

Over the long-term, scientists say there will be even less rainfall, less run-off into our rivers and storage and more severe and prolonged droughts.

We also know that our catchments are becoming more variable year-to-year and we’ve already seen that it only takes a couple of years of dry conditions for storage levels to drop to critical levels. In 2006, Melbourne’s water storage dropped from around 60 per cent to 40 per cent in just one year.

Melbourne’s population has risen by 20 per cent since 2007, placing further pressure on our rainfall-dependent water storage.

We utilise two key rainfall independent water sources in Victoria – desalinated water and recycled water. These sources will be increasingly important over the coming decades due to the impacts of climate change

The desalination plant can deliver up to one-third of Melbourne’s annual demand. The remaining two-thirds still needs to come from rainfall water held in our storages and supplemented with alternative sources including rainwater, recycled water and stormwater. The desalination plant helps to take pressure off our dams during droughts and helps build a buffer for future droughts during wetter years.

The desalination plant was not built to be turned on just when our water supply reaches critical levels. Instead its aim is to help make sure that our water supply doesn’t fall to those levels in the first place.

The desalination plant is connected to the Victorian water grid via a transfer pipeline.  As well as the connection to Melbourne’s system, the transfer pipeline has connection points for the three water corporations adjacent to the pipeline – South East Water, Westernport Water and South Gippsland Water. This enables Cowes, Wonthaggi, Korumburra, Poowong, Loch and Nyora to be supplied water from the Melbourne system or the desalination plant (subject to trades between water corporations).  Read more information on the transfer pipeline.

Geelong has a share of water from the Melbourne system and, subject to trades between water corporations, can just as easily be supplied with desalinated water in the future.

Read more information about Victoria’s water grid.

In June 2007, Victoria was in the grip of the ‘Millennium Drought’. Melbourne’s water storages were at 29 per cent and reservoirs had fallen by 20 per cent over the preceding 12 months. Stage 3a water restrictions had not stopped the decline in storage levels and the gap between supply and need for water over the previous year was about 250 GL.

Faced with this, the prospect of more prolonged droughts in future years and projected population growth, the Victorian Government decided to build the water desalination plant on the Bass Coast near Wonthaggi.

Construction and commissioning of the desalination plant was completed in late 2012 and AquaSure has a contract with the Victorian Government to operate and maintain the desalination plant and associated infrastructure until 2039.

Many of the desalination plant and transfer pipeline’s key components have a 50 to 100-year life, which extends beyond the end of the contract with AquaSure in 2039. These will continue to be an invaluable resource for the greater Melbourne region and for the period of the AquaSure contract and beyond.

The plant, located on the Bass Coast near Wonthaggi, uses the desalination method known as reverse osmosis and includes energy recovery devices to reduce power usage. The plant connects to Bass Strait via long intake and outlet tunnels, which not only draw in seawater but also protect the coast and marine environment by exiting beyond sensitive marine areas. The plant's world–class design includes Australia's largest green roof and it is surrounded by a 225-hectare ecological reserve open for public use.

The desalination plant's key environmental elements are:

  • Innovative design integrating the plant into the coastal landscape through low-profile buildings, dune creation and coastal habitat restoration.
  • Limited carbon footprint by offsetting operational power with renewable energy certificates.
  • Protected marine, coastal and estuarine environment by tunnelling under the coast and seabed.
  • Intake and outlet structure designed to minimise environmental impact.
  • Protected ecological values near the desalination plant, pipeline and power supply.
  • Boosting Melbourne’s water supply by moving away from only relying on rainfall and stream flows, which complements other work improving the health of our rivers.

The desalination plant is connected to the state's electricity network via an 87 km long dedicated underground power line that is predominantly located within the pipeline easement. All operational energy is drawn through this power line and is 100% offset by renewable energy certificates. Fibre optic cables have been installed with the power supply for plant, power and pipeline operations. More information on the power line can be found here.

The project is a Public-Private Partnership with a capital cost of $3.5 billion. The project is a public-private partnership between the State Government and AquaSure, the company contracted to finance, design, build, operate, and maintain the project until 2039. More information on project costs can be found here.

The Department of Environment, Land, Water and Planning's Water and Catchments Group manages the contract with AquaSure on behalf of the State. Many of the desalination plant and transfer pipeline's key components have a 50-to-100-year life. The plant and pipeline will be handed back to the state in working order at the end of AquaSure's contract in 2039.

Page last updated: 27/04/22