Melbourne

City Water System

Greater Melbourne’s water services follow a two-tier, state-owned model. Melbourne Water, owned by the Victorian Government, manages the catchments, major reservoirs and treatment plants. It supplies water in bulk, treats most of the city’s sewage, and is the region’s waterway, drainage and floodplain manager. Three state-owned retailers serve customers: Yarra Valley Water in the north and east, South East Water in the south-east and on the Mornington Peninsula, and Greater Western Water in the CBD and the inner and western suburbs. All four report to the Minister for Water through DEECA. The Essential Services Commission sets prices, while the Department of Health and EPA Victoria regulate drinking water and environmental performance respectively.

Resources & Supply

Most of Melbourne’s water comes from protected forest catchments and is supplied unfiltered. Open catchments, which include farmland, provide about 25%. The Victorian Desalination Plant at Wonthaggi can add 150 billion litres a year. Thomson Reservoir alone holds around 60% of storage capacity.

The catchments are drying. In 2024–25, rainfall was 19.9% below the 30-year average and inflows 36% below it, while average use rose to 1.35 billion litres a day. Storages had fallen to 69.3% by 1 September 2026. The 2026 outlook placed the system in Be Proactive, the second of four drought-response zones. Residential use was 169 litres per person a day, above the 150-litre target.

Wastewater & Stormwater

Melbourne Water’s Western and Eastern Treatment Plants treated 366,976 million litres of sewage in 2024–25; the retailers run smaller local plants. The Western Treatment Plant at Werribee takes about half the city’s sewage, and flows there are projected almost to double by 2050. It is also over its nitrogen limit for Port Phillip Bay: a three-year average of 4,080 tonnes a year against a limit of 3,100. Melbourne Water produced 39,935 megalitres of recycled water. As floodplain manager, it works to a Flood Management Strategy to 2031 for the 13,000 km² Port Phillip and Westernport region, which commits to updating flood models for climate change.

Investment & Resilience

Investment is rising sharply. In June 2026 the Essential Services Commission allowed Melbourne Water to invest $7.3 billion in infrastructure over 2026–31, 51% more than in the previous five years. The largest wastewater project is the $711 million Resource Recovery and Re-use Complex at the Western Treatment Plant. Now under construction, it will add 95 billion litres a year of primary treatment capacity. On supply, Victorian Government modelling for its 2025 Water Security Plan estimates that, within a decade, the region will need up to 95 billion litres a year more than the desalination plant at full output. Infrastructure Victoria has recommended piloting a recycled drinking water facility.

Key Challenges

1. Securing supply as catchment inflows decline and population growth adds demand.
2. Choosing and delivering new manufactured water supplies beyond full desalination output.
3. Reducing residential use from 169 litres per person a day toward the 150-litre target.
4. Bringing Western Treatment Plant nitrogen discharges back within their Port Phillip Bay limit.
5. Expanding treatment capacity as sewage flows to the Western Treatment Plant approach doubling by 2050.

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