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Description and rationale

All ownership systems must have at least a global borrow and payback system, and can also include local borrow and payback systems as well.  These allow for one owner to borrow water from another owner, with the requirement that there is payback of the borrowed water at a later time.  Borrow and payback is necessary to allow the ownership system to function and it enables better and more flexible use of available water. When an exchange occurs, unallocated water owned by one owner is utilised by another owner. The water used by the other owner is termed a borrow and is reconciled against the borrowing owner’s water share. The borrow must be accounted for to determine how much water the borrowing owner should later pay back.

The actual rules that govern borrow and payback are likely to be highly specific to any given water management plan. Currently there is only one river system in Australia where borrow and payback is allowed, namely the River Murray (authorised via the Murray-Darling Basin Agreement). The implementation of borrow and payback in Source is principally designed to model the arrangements authorised in the Murray-Darling Basin Agreement, as followed in practice. However, the implementation is intended to provide sufficient flexibility that would enable it to be used for other ownership systems.

How a borrow is shared between owners using a distribution system, accounted and reconciled, in Source, is described here. For more information on how a borrow is generated, in the first instance see the Scientific Reference Guide entry for Ownership at nodes and links - SRG.

Scale

On a spatial scale, ownership applies to a river system or defined section of a river system. Source utilises the concept of an ownership system, which covers the section of a river system where the same set of owners share water in the river. It is possible for one modelling scenario to include multiple ownership systems. Ownership of water at each modelled location can be tracked at every model time-step.

Principal developer

This version of Borrow and Payback has been developed as part of the development of Ownership modelling by eWater CRC for Source.

Scientific Provenance

Borrow and Payback has been modelled in predecessors to Source, such as IQQM and MSM, for many years. The concepts in these models have been updated and enhanced to suit the needs of Source.

Version

Source version number 2.19.1.

Dependencies

The model configuration in Source must include at least one Ownership System with at least two Owners for borrow and payback to be modelled.

Availability

Automatically included with the full version of Source.

Theory

Introduction

The Murray Darling Basin Agreement enables the operators in the River Murray to exchange the ownership of volumes of water between the states of New South Wales (NSW) and Victoria when the lending state has water surplus to its requirements. An example of this is when state owned tributary inflows are greater than expected. These excess tributary flows result in a state’s share of water in the river being surplus to that required to meet to meet its ordered requirements. Where possible, this excess water is utilised by the other state (owner) and the amount of water that needs to be released from storage is reduced. The water used by the other state (owner) is termed a borrow and is reconciled against the state’s water share. In the case of the River Murray, payback and account balances are reconciled at Lake Victoria.

The Agreement also allows for NSW and Victoria to borrow water from one another that is held in storage. As an example, NSW may borrow Victorian owned water held in Hume Reservoir if NSW has insufficient volume in Hume Reservoir to meet downstream demand (noting that NSW must have the capacity to payback the borrow). The Agreement requires that a separate account of borrow is maintained at some storages as:

  1. Different storages have different probabilities of spilling and filling. Thus water in some storages is more valuable.
  2. Water in Menindee Lakes and Lake Victoria can only be used to supply a very small amount of diversions.

Hence accounting is required for:

  1. System borrows – where unallocated water in the river is used to meet another owner’s order/requirement.
  2. Local storage borrow – where one owner has insufficient water in storage to meet downstream requirements and borrows from other owners’ shares in the storage.

To model borrow and payback arrangements similar to those described in the Murray-Darling Basin Agreement, Source supports a global borrow accounting system that applies throughout an ownership system, and also local borrow accounting systems for individual storages. The Agreement refers to an exchange of water, which indicates that when a state/owner borrows water, it needs to pay back to the owner it borrowed the water from. In a global system, payback can occur anywhere in the river network covered by the system of ownership.  In a local system, payback must occur at the same storage. Payback can only occur when the borrowing owner has water within the relevant system (the ownership system or a storage) to transfer to the lending owner.

Modelling of borrow and payback is performed for every model element where there is a loss from or a gain to the river. These include:

  • Inflow and confluence nodes
  • Wetland hydraulic connectors
  • Loss nodes
  • Supply point nodes
  • Controlled splitter nodes
  • Storage nodes
  • Links

Borrow and Payback accounting occurs mainly during the flow distribution phase, although some aspects of Borrow and Payback are also considered in the order phase.

Assumptions and constraints

Table 1. Assumptions and constraints

NoAssumption/constraint
1An ownership system must have a global borrow and payback system.
2An ownership system’s global borrow and payback distribution hierarchy applies in all storages where there is no local borrow and payback system.
3Borrow and payback systems only operate when ownership is enabled.
4A borrow can occur anywhere in an ownership system when one or more owners has insufficient water to meet requirements.
5When a global borrow and payback system is reconciled/paid back at a storage, the payback storage must maintain a local borrow and payback system. 
6For payback at a storage, owners are checked to see if they have to forfeit lending credit if they do not have enough airspace available. This is to ensure that the owner has enough capacity to be repaid.
7When a global borrow and payback system is reconciled/paid back at a storage, all owners in the system must payback water at the same storage.
8

Borrow and payback accounting will occur prior to resource assessment. Resource assessment and accounting must consider the total sum of all borrows in the model, and thus includes:

  • the global net borrow-payback matrix 
  • any local net borrow-payback balances held at user configured storages
9 The borrow network for the global borrow and payback system must be complete. That is, there must be a connection between each owner and every other owner (the connection can be made at any priority level).
10 The borrow network for sharing a system constraint must be complete. An operator is not going to refuse service to an owner if there is surplus capacity available to use to serve them. 
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