Electricity is an important output of the global energy system. Large amounts of water can be consumed in the process of producing electricity. This article focuses on how that water is virtually transferred from power-generating regions to electricity-consuming areas. We propose two metrics, i.e., water substitution ratio and virtual water transfer loss, to assess the efficiency of water use for power generation and virtual transmission of water through the power transmission system, respectively. These metrics are used to estimate the effects of the West–East Electricity Transmission project in China on the water resources used in power-generating regions. Results show that the electricity delivered by the project increased from 228 TWh in 2008 to 683 TWh in 2017. With the construction of wind and solar energy projects, the growth rate of virtual water was slightly slower than that of the electricity transmitted. In 2017, 2.4 km3 of virtual water was transmitted eastward. The corresponding virtual water transfer loss throughout the transmission system was approximately 100 million m3. We estimate that the virtual water footprint of the project will exceed 4.4 km3 by 2030, which may affect the sustainability of water resources and the ecological environment in western regions of China.