Victoria’s water grid supports water markets and allows farmers, the Victorian Environmental Water Holder, and water corporations to buy and sell water entitlements and seasonal allocations, so they can manage their own risk according to their willingness to pay. The water markets allow us to share water security benefits in ways that are equitable, responsive, and transparent.

We have an opportunity to improve the way we use the infrastructure, and to continue to build effective and efficient ways for buying and selling water.

What we are doing

  • Improve the effectiveness of water markets
  • Increase water market transparency and information sharing
  • Develop the water market in south central Victoria
  • Improve trading rules in northern Victoria
  • Develop trading rules in other water systems

Market Effectiveness Report

The first statewide review of the effectiveness of Victoria’s water markets has been released. The review covered all Victorian water markets, including the northern, southern and western regulated surface water markets, unregulated surface water markets and groundwater markets.

Victoria continues to lead in the active monitoring and development of water markets to make sure that they work efficiently, with effective governance frameworks and trading rules to protect existing entitlement holders and the environment.

While this review found that Victorian water markets are effective overall, we need to make sure water markets continue to develop to match the level of demand and sophistication in the market. Victoria will continue to lead the way in water market development in Australia by acting on the findings from this review.

See Victorian Water Register

South Central Water Trial

Following the review of market effectiveness, an innovative five-year water market trial has commenced in south central Victoria. The trial will include the rapidly growing regional centres, such as Geelong, as well as the southern irrigation districts. The trial will build on major water security projects such as the increasing connectivity of the grid and test for significant opportunities facilitated through trade, such as informing or avoiding future grid augmentations. The trial also presents opportunities to develop trade between urban users, the southern irrigation districts and the environment. Balancing economic, environmental and water security values during long periods of drought will be core considerations when evaluating the trial’s success.

The south central market trial will be collaborative, building understanding and confidence for all potential users. DELWP will work closely with stakeholders to define institutional arrangements and governance. The trial will initially focus on more clearly understanding the opportunities and barriers that market development would present.

Page last updated: 25/07/19