VICTORIA'S coal-fired power industry is seeking a substantially bigger share of the state's water, telling the Brumby Government that plans to reduce carbon emissions will probably increase its water needs.
Latrobe Valley power generators already use about 125 billion litres of water each year - equivalent to one-third of Melbourne's annual consumption - and have asked the Government for improved access to dams and groundwater.
Among a host of controversial requests, generators want to tap into a portion of unallocated water, likely to be about 20 billion litres a year.
The bid has sparked a new battle between power generators and environmentalists who believe the water should go to stressed rivers if it is to be tapped.
The generators also want their water supplies guaranteed rather than subject to availability, and have asked the Government to relax rules that govern the waste-water they pump into Gippsland's rivers.
The Government is writing a 50-year water strategy for Gippsland, and the power generators have lobbied for their needs to be the top priority.
The use of Blue Rock reservoir, north of Moe, looms as a key decision. About 40 per cent of its water is now allocated to power companies, but close to 36 per cent of the remainder is unallocated.
In a joint submission to the Government, the five big Latrobe Valley power companies have urged that ''unused volumes in Blue Rock … are reserved exclusively for its bulk entitlement owners''.
In a separate submission, TRUenergy said the introduction of new and cleaner coal-fired power stations would depend on water availability, and any tapping of Blue Rock's unallocated water should keep this in mind.
TRUenergy said Blue Rock's water should not be distributed in a way that ''adversely impacts the viability'' of companies investing in the valley.
''Some of the existing generators and potentially new entrants will need to install carbon capture and storage plants which may well require additional water usage requirements,'' the submission said.
The claim follows a report this year by the National Water Commission that indicated coal-fired power plants with carbon capture and storage could be one-quarter to one-third more water intensive.
The Government is yet to honour a promise to use Blue Rock water for environmental flows in the Latrobe River and Gippsland Lakes catchment. Environment Victoria spokesman Mark Wakeham said it was therefore irresponsible to consider further use of Blue Rock water for consumption.
''At a time when the industry's social licence to operate is coming into question, it's a pretty audacious bid to be asking for the water that could be delivering environmental flows,'' he said.
Power companies also sent a reminder to the Government that they were under no obligation to continue putting 46 billion litres of their treated waste water into the Latrobe River - a convention that boosts the river's meagre flows. They complained that quality standards imposed on the waste water by the Environment Protection Authority were too strict.
The Government said yesterday it would ''look at all options'' before finalising a strategy for Gippsland's water.
The water needs of power stations have caused headaches for several years. Under former premier Steve Bracks the Government was keen on sending Melbourne's treated sewage to Gippsland for cooling purposes at power stations.
But earlier this year the idea was rejected by Water Minister Tim Holding as too expensive.