As U.S. population and associated economic development continue to expand, the demand for electricity increases. Thermoelectric generating capacity is expected to increase by approximately 6 percent between 2008 and 2035, according to projections from the Energy Information Administration's (EIA) Annual Energy Outlook 2010 (AEO 2010). Depending upon the assumptions invoked, water withdrawal to support electricity generation is expected to stay the same or decline slightly over the same time period. However, water consumption is expected to increase by anywhere from 14 to nearly 26 percent on a national basis.

Withdrawal is expected to remain the same or decrease because plants likely to be retired between 2005 and 2030 are older facilities that are more likely to employ high-withdrawal, once-through cooling. New facilities that will be built over that time period are likely to employ lower-withdrawal but high-consumption wet recirculating cooling systems. These projections are based on a business-as-usual approach, and do not reflect responses to potential greenhouse gas mitigation regulations.

A potentially influential factor in future water use in energy generation is carbon capture and sequestration (CCS). In fact, if coal is to remain an important component of energy production in the United States under any future climate/energy legislation, CCS will be essential. Carbon capture technologies that are commercially available (on a small scale) today typically consume large quantities of water, and could increase water consumption by 50 to more than 90 percent depending on the power generation platform.

The additional water required for a power plant with carbon dioxide (CO₂) capture technology is largely due to the additional cooling water requirements used during capture and compression, thereby increasing the evaporative losses from the cooling tower. Given the factors noted above, coal-fired power plants may increasingly compete for freshwater with other sectors such as domestic, commercial, agricultural, industrial, and in-stream use – particularly in regions of the country with limited freshwater supplies. In addition, current and future water-related environmental regulations and requirements will challenge the operation of existing power plants and the permitting of new thermoelectric generation projects.

The interface of energy and water, or the water-energy nexus, can be defined as the many relationships between energy and water that are necessary to ensure an adequate supply of both resources for every purpose. Understanding the interlocking nature of water-energy interactions is the key to determining how to make the most efficient use of these critical resources, both for short-term economic benefit and for longer-term societal and environmental sustainability. A summary comparison of water and energy issues shows a striking correspondence between issues on the water side and issues on the energy side. The immediacy of these issues lends particular urgency to the effort to understand and manage the water-energy nexus.