Large and reliable volumes of water are required to cool thermal power plants. Yet across the world growing demands from society, environmental regulation and climate change impacts are reducing the availability of reliable water supplies. This in turn constrains the capacity and locations of thermal power plants that can be developed. We present an integrated and spatially-explicit energy systems model that explores optimal capacity expansion planning strategies, taking into account electricity and gas transmission infrastructure and cooling water constraints under climate change. In Great Britain, given the current availability of freshwater, it is estimated that around 32 GW of combined cycle gas turbine (CCGT) capacity can be sustainably and reliably supported by freshwater. However, to maintain the same reliability under a medium climate change scenario, this is halved to 16 GW. We also reveal that the current benefit of available freshwater to the power sector is approximately £50 billion between 2010 and 2050. Adapting to expected climate change impacts on the reduced reliability of freshwater resources could add an additional £18-19 billion in system costs to the low-carbon energy transition over the time horizon, as more expensive cooling technologies and locations are required.