Above map showing inundation of Cranky Rock dam.
Opponents say the vulnerable Cliefden Cave system could still be flooded with up to 50 metres of water if a dam of the Belubula River is built at either of the two sites flagged at Cranky Rock.
After analysing the report released on Monday, Save Cliefden Caves Association spokesperson Bruce Welch says it's clear that dams at Cranky Rock would flood the Cliefden Caves site and would be a disaster for the environment and future scientific research on the caves.
"NSW Water Minister, Kevin Humphries assured ABC Central West radio that the Cliefden Caves would not be affected," Mr Welch said.
"Our examination shows that Needles Gap will be flooded with up to 50 metres of water if the Cranky Rock Dams go ahead - heavily impacting on a number of the caves, fossils and thermal spring."
The report tabled by State Water appeared to give the Cliefden Caves a reprieve, after the site at Needles Gap was taken off the table.
Scientists have expressed their concerns about the impact of building the 700-gigalitre dam at Cranky Rock, further up the Belubula system.
Associate Professor Armstrong Osborne is one of Australia's leading cave scientists at the University of Sydney.
He said not enough is known about the hydrology of the cave system at Clifeden to predict the effects of the proposed dams.
"The Cranky Rock proposals may also represent a threat to caves not flooded by the dams. We currently don't know enough about the hydrology of the cave system at Cliefden to predict the effects of these proposed dams." Associate Professor Osborne said.
Associate Professor Stuart Kahn, a water expert from the University of NSW School of Civil and Environmental Engineering, argues the need to look at alternatives to the dam for water security in the central west.
"Clearly there is an impending need to augment water supplies in a number of NSW central west towns, however the construction of the proposed dam is only one of many ways that water supplies could be better managed," Dr Khan said.
"I think its short-sighted to have a feasibility study that is essentially a yes/no assessment for this one project. Instead, a study at this stage should be taking a much broader look at various available water management strategies and assessing them comparatively."
Dr Khan said Canowindra receives 700 millimetres of rainfall a year but evaporation is over 1000 millimetres a year.
"As such, storing water in shallow, high surface-area reservoirs will result in significant water losses, especially during the summer months," he said.
"Precious little water flows down the lower reaches of the Belubula River anyway, due to [Carcoar Lake and Lake Rowlands] further upstream."
Dr Khan said viable alternatives including urban stormwater harvesting, non-potable water recycling, indirect and direct potable reuse and managed aquifer recharge.
Mr Welch said that the NSW Government must explore these alternatives and rule out any dam that would have an impact on the Cliefden Caves site.