However, China's per capita water resources amount to only one-third of the global average. According to the report, by 2020, more than 60 per cent of the coal power industry's water consumption is projected to take place in areas of high water stress.
China is the world's largest coal consumer, Greenpeace said.
The report also recommends that both the coal power overcapacity and water stress problems be resolved by optimising water saving in the 162 provinces.
"The proposed plan could reduce water consumption in the coal power sector by up to 500 million cubic metres in 2020 in high water-stressed areas," the report stated.
Greenpeace stated that if the expansion goes unabated, the coal power capacity in water stressed areas is projected to jump from 437 GW in 2016 to 527 GW in 2020.
It thus urged that China reduce its coal-fired capacity by retiring plants in areas of high water stress and halting the planning and construction of new coal-fired power plants.
"Targeted capacity cuts in regions with high water stress would free up water for human consumption and economically productive uses," said senior global coal campaigner Lauri Myllyvirta.
Coal is an extremely water-intensive energy source, exacerbating China's already severe water shortage.
Speaking of the over capacity, the report states that in 2016, 12.5 per cent of national coal power installed capacity, amounting to 114 GW, could have been immediately eliminated with no risk of interruption to grid operations.
"By 2020 this figure is projected to increase to 213 GW, or 19 per cent of national installed capacity," the report states.
Based on the report's findings, Greenpeace urges that China reduce excess coal power capacity in high water stress areas by 179 GW before the end of the 13th Five-Year Plan period which ends in 2020.
"Not only is coal the number one cause of smog, but it also guzzles a huge amount of water. The potential to address water scarcity when cutting overcapacity has been overlooked in the past, which is something we hope our research can change," said Myllyvirta.
To support its West-to-East Power Transmission Project of the central government, many coal bases were developed in Central and Western China during the 12th Five-Year Plan period (2011-2015).
"This resulted in the rapid expansion of the water-intensive coal power sector in these water-scare regions, which severely affected local water systems," said the report.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)