We show that freshwater withdrawal has been decoupled from thermoelectric power generation growth at the national level due to the increased adoption of air-cooling and seawater-cooling technologies and advanced large generating units as well as water use efficiency improvements in this period. Nevertheless, the construction of large coal-fired power generation hubs has increased water stress in many arid and water-scarce catchments in northwestern regions of China. The westward development of the power industry necessitates water-withdrawal caps and the integration of water risk analysis into energy planning.