CEO Vince Hawksworth, rear, with Macquarie Settlement irrigator Ross Davey following the opening of the pipeline from the Poatina re-regulation pond

The reliability of the power supply depends on water in storage as well as infrastructure. Hydro Tasmania constantly reviews the energy capacity of our water storage, see figure 10. The continuing lower rainfall pattern over 12 years is significant data in the history of the system. Based on this data, we have revised the long-term rating of 10 000 GWh per annum over the last three years, down to 8700 GWh in 2008/09.

As noted above, the main resource we use in generating electricity is water. We need to manage our power system to ensure the long-term sustainability of this resource so we can meet demand for energy.

This means careful management of water storages. We also consider the needs of other water stakeholders and the environment. Meeting the increasing and various demands for water in Tasmania is becoming increasingly complex.

Water storages and energy generation

Our management of water storages is guided by our prudent water management strategy and water storage procedures. These operate with our trading strategy and storage operating rules to balance sustainable energy supply, long-term storage levels, efficient use of water and water quality.

The prudent water management band for our storage levels is between 30 and 50 per cent of full energy6. We aim to maintain these levels.

In the past five years, storage levels have been lower than this for most of the time. The variance of storage levels and the amount of energy stored is shown in figure 4.

In July 2007 we implemented a strategy to rebuild storage levels to over 30 per cent of full energy by 30 June 2013. Our target for 2008/09 was to rebuild storages to 26.1 per cent from the low position of 19.1 per cent the previous year. This strategy had the potential to substantially increase our use of the gas-fired power station and the energy imported via the Basslink cable. Through a combination of careful water management all year and substantial rain in the later months, we exceeded this target to reach 27.7 per cent. The actual use of gas and net flows over Basslink over the past five years is shown in figure 11.

Managing the water storages for sustainable ecosystems and water quality adds a layer of considerations through a set of environmental risk bands for the storage levels.

Meeting stakeholder needs

In managing a sustainable water supply, Hydro Tasmania also takes account of the needs of other uses, such as primary production, industry and recreation.

We seek to find collaborative and mutual arrangements to meet these needs. Where needs are conflicting, we facilitate and collaborate with stakeholders to find solutions.

In a small number of cases, our planned asset maintenance and upgrade projects require changes to water conditions that affect both upstream and downstream water users. In 2008/09 there were two such cases: planning the future shutdown of the Poatina Power Station to paint the penstock, and the lowering of Lake Meadowbank for major maintenance works. In both cases we changed the timing of these projects after stakeholders raised issues that needed more time to resolve.

Irrigation

Demand for irrigation water is expected to increase as the Tasmanian Government implements its irrigation strategy through the Irrigation Development Board (IDB). Hydro Tasmania will have a major role in the proposed schemes, managing and providing water in catchments where we operate.

Hydro Tasmania is obliged to supply irrigators with a reasonable supply of water in the Ouse-Shannon catchment and on the Lake River. Over the years, meeting these obligations has raised issues about water availability for irrigation, generation and ecosystems.

In May 2009, Hydro Tasmania, the IDB and other stakeholders agreed on a holistic solution to the Ouse-Shannon catchment that also includes the neighbouring Clyde basin, which has suffered severe water shortages in recent years. This solution includes new storages and diversions.

In 2008/09, we proposed, agreed and completed a solution to meeting obligations in the Lake River. Hydro Tasmania joined a private consortium of irrigators from the Macquarie Settlement to construct a pipeline from the Poatina re-regulation pond. Previously, supply had come from Arthurs and Woods lakes in the Central Highlands which are popular with fishers and subject to ecological stress in times of drought.

In 2008/09, Hydro Tasmania developed a transparent pricing system so that irrigators who purchase water from us will pay prices that reflect the lost generation value associated with that water. For more information, see our web site.

Recreation

Hydro Tasmania releases water for major recreational events. During the year we allocated water to events including the Cataract Extreme Race, the National Rowing Championships and the Mark Webber Challenge. In the coming year, we will release water for the Wildwater World Cup 2009 to be held in October and November. We are the naming rights sponsor for this event.

Hydro Tasmania generates a small amount of waste from operations. 2008/09 data is in table 9.

This year we focused on developing consistent and replicable data collection and collation as a first step to developing a business-wide strategy. The changes mean we are unable to compare with previous years.

The challenge remains to develop and implement a robust whole-of-business waste management strategy.