All fossil fuels can be burned in air or with oxygen derived from air to provide heat. This heat may be employed directly, as in the case of home furnaces, or utilized to produce steam to drive generators that can supply electricity.

It goes without saying that condenser systems need a constant, ample supply of cooling water and this is supplied in a separate circuit from the cooling tower which cools the condenser cooling water by direct contact with the air and evaporation of a portion of the cooling water in an open tower.
Water vapour seen billowing from power plants is evaporating cooling water, not the working fluid.

Like all thermoelectric power systems, coal plants require cooling. Three major options are available: once-through, wet-recirculating, and dry cooling. About 53 percent of coal plants in the United States use once-through cooling, about 40 percent use wet-recirculating, and less than one percent use dry-cooling.