What do the terms ‘carryover’ and ‘parking’ mean when talking about irrigation water?
‘Carryover’ is a term used for the ability to hold allocation water on certain water licence types from one irrigation season to the next.
‘Parking’ is the term used for storing allocation water on another owner’s water licence. The owner agrees to carry over water on their water licence into the new season on your behalf. This can be in your licence region or another water region and/or state — subject to trading restrictions at the time.
Carryover parking is a tool to enable water licence holders the ability to hold unused water or purchase additional allocation water for use in the new water season at nominal costs.
Carryover volume percentage is limited, with some water licences and different trading rules applying, based on the region and water licence type.
In Victoria, carryover is a maximum 100 per cent of entitlement for both high-reliability and low-reliability shares.
There is a five per cent storage and evaporation loss on the volume returned to licences in the new season.
Access to carryover water in the new season is dependent on spill risk out of Hume Dam for Murray licences and Eildon Dam for Goulburn licences.
The spill risk is determined and announced by the Victorian water resources manager.
In NSW Murray, carryover of up to 50 per cent on general security licences is permitted. Unlike Victoria, there are no storage or evaporation losses and a combined carryover and allocation of a maximum 110 per cent is allowed in the new season.
A NSW Murrumbidgee general security licence holder can carryover up to 30 per cent of entitlement volume, which is available for use at the start of the new season. The maximum volume of allocation carried over and allocated in a season is 100 per cent of the entitlement.
Maximum carryover capacity is calculated as a percentage of the total licence volume.
Are there risks?
Anything to do with water trading has some form of risk and carryover/parking is no exception.
Irrigators considering parking on another water licence need to understand the risks and costs associated, including those dependent on the season, the water licence type, region and allocations.
Climatic risks are associated with all carryover licence types.
Above average rainfall can cause spill risks in Victoria and NSW.
Increased allocation volumes throughout the season can affect Victorian low-reliability and NSW general security entitlement holders.
Victorian Murray spill risk is related to Hume Dam, either as physical spill over the dam wall (2016-17 season) and/or internal spill above Victoria’s 50 per cent share of Hume Dam space (2017-18 season).
Parking on Victorian Murray high-reliability licences has a higher risk than parking on low-reliability licences and therefore there is also a pricing difference from about $15/Ml for high-reliability to $40/Ml for low-reliability.
Victorian Goulburn spill risk is based on Eildon Dam and is a physical spill measurement.
NSW Murray risk is based solely on allocation increase and maximum 110 per cent allocation per licence. Therefore based on maximum 50 per cent carryover, can get to 60 per cent allocation before any water is lost.
For NSW Murrumbidgee if carryover is maximised at 30 per cent and new season allocations reach above 70 per cent, all additional water is socialised to other users in this valley.