Thermo-electric generation represents 70% of Europe's electricity production and 43% of water withdrawals, and is therefore a key element of the water-energy nexus. In 2003, 2006 and 2009, several thermal power plants had to be switched off in Europe because of heat waves, showing the need to assess the impact of climate change on cooling constraints of thermal power plants. An integrated water-power model of the Iberian Peninsula was developed in this study. It includes a physical hydrologic representation, spatially and temporally resolved water demands, management of water infrastructure and a simple power system model. The system was evaluated under present and future climatic conditions using different climate change scenarios. The cost of cooling constraints is found to increase by 220–640 million €/year, for the period 2046–2065 depending on the climate change scenario. Average available capacity of freshwater-cooled thermal power plants is reduced by 16–30% while production is reduced by 5–12% in summer. The power production is shifted from plants equipped with once-through cooling systems (−5 to −14%) towards plants using closed-circuit cooling systems (+41 to +95%).