A new report shows coal power has an enormous need for water.

The new report commissioned by the Australian Conservation Foundation says the NSW and Queensland coal industries use about as much water as every household in the Sunshine State.

Its lead author, associate professor in water resources at the University of Adelaide Ian Overton, has found that the coal industry in NSW and Queensland consumes 383 billion litres of water every year.

This is equivalent to all the water used by the entire population of greater Sydney.

In fact, coal power uses about 120 times as much water as wind or solar to produce the same amount of electricity.

Together, coal mining and coal-fired power is responsible for about 4.3 per cent of all water used in NSW and Queensland.

ACF says there are many examples of the coal industry not having to pay a fair amount for water use, one of the biggest and most recent being the unlimited water mining licence granted to Adani.

ACF chief Kelly O'Shanassy says the coal industry continues to drink deep while farmers are still dealing with drought.

“Not only do coal mines and coal-fired power stations consume vast quantities of water that could otherwise support people, wetlands and wildlife, the coal industry also contaminates water, leaving toxic ash dams and leeching poisonous water into creeks and rivers,” she said.

“When you add coal-fired electricity's water consumption and contamination to its climate pollution, it's clear Australia should rapidly replace coal-fired power with clean energy.”

The full report is accessible here.