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Hunter River Salinity Trading Scheme


Water quality and the salinity level in the Hunter River has become an important issue for water users, industry, government agencies and the community over recent years.

The Hunter River catchment includes a large proportion of salt bearing sedimentary rocks and soils, and surface and underground drainage from this contributes natural salinity to the river. But activities such as coal mining, power generation, industry and land clearing have increased the level of salinity in the river.

The coal mining and power industries generate large amounts of saline water during their operations.  Factors affecting the rate and salinity of wastewater production include rainfall, rate of groundwater seepage into mine workings, use of water for on-site coal washing and dust suppression.  Some saline minewater is stored for use on the mine site but the ability to store wastewater is controlled by the capacity of off river storage dams.  Some saline wastewater may need to be disposed of.  They may choose to do this through discharge to the river system.

Some more modern mines have water management systems which reduce the amount of saline water needing to be discharged, but this is not possible for all mines in the Hunter Valley.

In response to the need to control saline water discharges into the Hunter River, the DPI Water and the Environment Protection Authority, with the cooperation of other interested organisations, developed the Hunter River Salinity Trading Scheme, an innovative method which reduces saline levels in the river while allowing mines and industry to discharge their excess water during periods of high flow thus maintaining instream water quality.

Aims and Objectives

The main objectives of the Hunter River Salinity Trading Scheme are:

  1. To manage saline water discharges to minimise their impact on irrigation and other water uses, and on the aquatic environment of the Hunter River catchment. 
  2. To achieve this at the least overall cost to the community, in an equitable and flexible way that provides ongoing financial incentives to further reduce pollution through saline water discharges.

Generally, the scheme aims to keep salinity levels in the Hunter River below an agreed target salinity level of 600 EC* at Denman and 900 EC at the Glennies Creek/Hunter River junction and at Singleton.  This is achieved by limiting discharges of saline wastewater from coal mines and power stations to periods of flow in the river when impacts from these discharges are minimised by dilution effects.  This is managed through a system of discharge “credits” which determine the discharge of each mine or power station participating in the scheme (known as “licence holders”). 

Roles and Responsibilities

Environment Protection Authority (EPA)

  1. Sets flow/salinity objectives.
  2. Issues licences and rules
    • approves tributary protection limits
    • approves equipment modifications
    • sets monitoring and reporting requirements.
  3. Manages credit trading
    • approves and processes trades
    • maintains Credit Register
    • informs NOW of credit trades.
  4. Receives
    •  copies of River Register from NOW
    •  reports from licence holders.

DPI Water (NOW)

Operates the system of water flow monitoring and discharge control.

  1. Provides monitoring (flow and salinity recording) to licence holders.
  2. Provides modelling (flow and salinity predictions) to licence holders.
  3. Maintains and distributes the “River Register” which,
    •  informs participants of flows and discharge opportunities
    •  notifies river “travel times” and discharge allowances according to conditions in each sector of the catchment.
  4. Supplies copies of the River Register to the EPA and credit holders.
  5. Receives information on credit trading from the EPA.

Credit (licence) holders (Power generators and coal mines)

  1. Discharge saline water when advised.
  2. Trade credits and report to EPA.
  3. Monitor discharges and environment.
  4. Report to EPA and NOW.

How it works

Monitoring of the Hunter River shows that at the start of high flow periods (“events”), the salinity level rises sharply for a short time as rainfall runoff flushes ground and surface salt through the tributaries into the river (a first flush salt “spike”). Then, as an increasing volume of fresh water flows through the system, conductivity falls correspondingly.

The relationship between river flow and electrical conductivity
Figure 1: The relationship between river flow and electrical conductivity

Scheme participants (“licence holders”) are allowed to discharge specified amounts of excess saline water, when its affect on the conductivity level in the river is minimised by the high volume of fresh water.

When the flow in the river is low (below 2000 ML/d at Singleton), no discharges are allowed. Discharge can be carried out during high flow periods (2000 to 10000 ML/d at Singleton) on advice from NOW, through the River Register, and with the use of discharge credits.  When the river is in flood (as advised by the River Register), the licence holders can discharge unlimited saline water within the limits set by their individual tributary limit.

A typical discharge opportunity at Singleton
Figure 2: A typical discharge opportunity at Singleton

NOW monitoring of weather reports, rainfall in the catchment, streamflows, instream salinity levels and surface conditions (wet or dry) allows the timing and extent of high flow events to be predicted.

This work is carried out by a NOW river operations engineer at Muswellbrook (the “operator”). By combining data from previous events with current gauge readings, the NOW operator:

  • Assesses the likelihood of an event occurring;
  • Estimates the rate and volume of river flow and instream salinity for each section of the river;
  • Calculates the total tonnage of salt that may be discharged during the event (Total Allowable Discharge);  and
  • Calculates the start and finish times during which licence holders can discharge excess saline water.

After completing the steps of monitoring, analysis, assessment and calculation of river flow and allowable salt discharge, the NOW operator prepares a “River Register” for the block which lists the licence holders, the total tonnage of salt that may be discharged, and start and stop times.

The River Register is then distributed to the licence holders and the EPA. 

The licence holder must then calculate its share of the volume of discharge, based on the amount of discharge credits it has, its location, and the point where its discharge water flows into the Hunter River.

The mine operator or power station is also responsible for calculating the “travel time” (or “lag”) between its water storage site and the point the discharged water reaches the Hunter, to ensure it complies with the start and stop times provided by the operator.

The NOW operator and hydrological officers in the field continue to monitor the event through its progress to ensure licence holders’ reports of the amounts and timing of their discharges are correct.

Discharge Credits

Discharge credits exist to facilitate the sharing of discharge entitlements.  There are 1000 credits and these can be used each time discharge is allowed; that is, each credit entitles the holder to discharge 0.1% of the total allowable discharge into a specified block of water.  Each credit can be used only once for each high flow block.  As an example, if a Total Allowable Discharge of 100 tonnes of salt is declared, each credit that an individual mine holds, entitles it to discharge 1/1000 of that or 0.1 tonnes of salt.  A mine which holds 10 credits could then discharge 1 tonne of salt into the specified block.

Licence holders can trade, buy or sell credits if they find their need to release saline waste water means they need more or less credits. The EPA has procedures for trading credits and a credit transfer is not valid unless approved by the EPA.

River Sectors

For the purposes of the scheme, the river has been divided into 3 sectors giving 3 reference points for the determination of flow and salinity levels and for prediction of discharge events.  Conductivity objectives for each sector during high flows are linked to the sector reference points which are in the river at Denman, Glennies Creek/Hunter River confluence and Singleton. 

These objectives are:

Denman 600 µS/cm
Glennies Ck/Hunter R confluence  900 µS/cm
Singleton 900 µS/cm

Allowable Discharges and Blocks

Allowable discharges are based on a “block” of water, which is the amount of water which passes the Singleton gauging station during a specified 24-hour period; that is, 365 blocks per year.  The blocks are based on modelled river flow and are numbered 1 to 365 followed by the year.  For example, if today is day 205 of 1998, block 205-98 is passing Singlet today but the block at Muswellbrook may be numbered 206-98, ie..block 206 will be passing Singleton on day 206 of 1998. 

Blocks are rated in terms of flow as low, high or flood flow. As no discharges are allowed during low flow periods, and unlimited discharges (up to each licence holder’s tributary limit) are permitted during flood flows, the credit system applies only to controlled discharges during high flow periods.

River Sector Flow Categories

River Sector “Low” Flow
“High” Flow
“Flood” Flow
 “Upper” <600   600 - 2000 >2000
“Middle” <1800 1800 - 6000 >6000
 “Lower” <2000 2000- 10000 >10000

No discharge of saline water is permitted during low flow periods.  During high flow periods, discharge of saline water will be permitted in a sector when the river salinity is below the sector threshold and the river flow is within the high flow range for that sector and the modelled conditions show that the flow event will exist when the block reaches Singleton.  During flood flow events, unlimited discharge may occur.

Predicting Flow and Salinity

To calculate the flow rate, the NOW operator combines data from river gauging stations in the “CAIRO” computer model to produce “predicted”, “observed” and “actual” data.

The “predicted” data is based on previous readings and weather reports; “observed” is gauge readings at the time (which need to be carefully checked against inaccuracies caused by high river conditions or technical faults); “actual” is the result of computer processing of the updated data until the estimated river flow is as accurate as possible.

This information allows the operator to permit the discharge of saline wastewater with the least possible impact on the river.

Sector Discount Factor

Application of a discount factor has been incorporated into the scheme as an added safety precaution.  The Sector Discount Factor is the factor which participants in a particular sector must apply to their individual discharge entitlement (based on thier credit holding).  It is used to reduce saline discharges in a particular sector where the full exercise of discharge entitlements is predicted to cause the salinity objective, i.e. 600 EC in the upper sector or 900 EC in the middle and lower sectors, to be exceeded. In most discharge events, the sector discount factor applied is 1, allowing full utilisation of the total allowable discharge for the block.  The river operator may choose to apply a sector discount factor between 0 and 1 in any sector to protect downstream water quality.

For example, a declared discharge event may occur throughout the river system but where a large proportion of fresh water entering the Hunter River is expected to originate from the Goulburn River.  This would mean that a discharge event would occur in all sectors but full entitlement discharge from mines above the Hunter/Goulburn confluence could cause exceedence of the upper sector objective.  In this case, a Total Allowable Discharge amount is set for the river system but a reduced discount factor would be applied to the upper sector to reduce the amount of salt discharged by participants in that sector.  All participants are required to determine their share of the Total Allowable Discharge (tonnes of salt) based on their credit holding and then multiply that figure by the Discount Factor to determine the tonnage of salt that they may discharge.  A participant in the upper sector would find that their discharge entitlement would be reduced by the lower discount factor.

Timing of Discharge Events

Determination and declaration, through distribution of the River Register,of a salinity discharge event needs to be undertaken without delay to give maximum notice to participants. Licence holders at the top of the catchment need a minimum seven hours warning of an opportunity to discharge if possible. 

* 1 EC unit is equivalent to 1 microsiemens per centimetre (µS/cm)
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