The green NGO released data related to water consumption patterns of coal power plants in Maharashtra, Madhya Pradesh, Uttar Pradesh, Karnataka, Andhra Pradesh, Telangana, Chhattisgarh which are facing drought-like situation.
The coal-fired power plants in these states consume water that could meet the basic needs of 50 million people for a year, it said.
The water crisis this year has highlighted the urgency of shifting to a diversified energy model that reduces India's reliance on coal power to save water and prevent power outages, it said.
"A Greenpeace India analysis of a report released in March this year estimates that the total freshwater consumption of coal power plants in India is 4.6 billion cubic metres per year.
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"This is enough to meet the basic water needs of 251 million (25.1 crore) people. This figure will more than double if all proposed plants are built," Greenpeace said in a statement.
"It is particularly deplorable for the government to continue promoting more coal power plants, including in water scarce regions, instead of investing in renewable energy solutions that would reduce the water burden as well as our contributions to climate change," said Jai Krishna, Greenpeace Campaigner.
Greenpeace India said some companies have been forced to shut down plants this year due to the severe water crisis, affecting grid stability as well as company revenues.
The NGO said the water crisis of 2016 has highlighted the urgency of shifting to a diversified energy model that reduces India's reliance on coal power, to save water and prevent power outages.
The water consumption for solar and wind energy is negligible in comparison to coal and the government's ambitious 175 GW target for wind and solar energy holds the key to securing both water and electricity supplies in water stressed regions, it said.
On the other hand, the total capacity of power plants in Madhya Pradesh which use fresh water in cooling towers is 9344 MW and these coal-based power plants altogether consume about 222 million cubic metres of water each year.