But current site owners Energy Australia said the ponds date from a time before they owned the land.

Out of the Ashes II, a report from the Hunter Community Environment Centre, looks at the issue of coal ash dams at the sites of coal-fired power stations across NSW.

The ash - a byproduct of burning coal to create electricity - is stored in a man-made dam or pond.

The report estimates the five operating coal-fired power stations in NSW collectively generate about 4.8 million tonnes of coal ash a year.

Of that, about 3.8 million tonnes annually is dumped into on-site ash dams, placement areas, or mine voids, which have now collectively accumulated about 160 million tonnes of coal ash.

The Tallawarra A power plant - built on the shores of Lake Illawarra - ceased operating in 1989 but the report claims the ash ponds on-site still pose a problem.

It estimated that there was about three million tonnes of ash in the dams.

From that the report's writers estimated around two tonnes of metals a year leaches into the lake.

Energy Australia owns the Tallawarra gas-fired power plant that has been operating since 2009, after acquiring the site in 2003.

"The repositories that stored ash, which is a by-product of burning coal, are affiliated with the former coal-fired plant," an Energy Australia spokesman said.

"However, we acknowledge that today they're on our land.

"That's why we conduct regular monitoring of the groundwater as part of our environmental stewardship of the site, on top of surface water and air emissions, with this information readily available to the state's regulator.

"We work hard to ensure that any impacts from our operations are socially and environmentally acceptable, and in line of what's expected by the NSW Environment Protection Authority."

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