Integrated energy�water systems have been explored using different process integration techniques considering the energy�water�carbon nexus to minimize the carbon footprint, e.g., pinch analysis techniques (power cascade table, water cascade table, and energy planning pinch diagram). However, the power and water losses while considering the energy�water�carbon nexus have not been explored in detail in the previous works. This work focuses on the modifications of the existing pinch analysis methods for energy�water�carbon nexus study while considering power and water losses, for an optimized energy�water system. Power and water losses should not be neglected in the analysis as they have a significant impact on the carbon emissions and overall capacities of energy and water. The effect of losses on energy storage capacity, outsourced electricity, water supply volume and water storage capacity were evaluated on an industrial case study. Results from the case study demonstrate that, while considering power losses during power allocation can lower storage capacity, it tends to raise the needed outsourced electricity supply. As water supply volume tends to increase, the water storage capacity tends to decline when losses are considered. The results were compared to the data without losses, and it was observed that the storage capacity of energy decreases by 4 while outsourced energy increases by 6. Water supply volume increases by 20 but water storage capacity decreases by 13.7. The emissions from energy system remains same while from the water system the emissions rise significantly by 20. It is expected that consumers that takes power and water losses into account will produce more realistic and reliable energy, water, and carbon reduction targets and prevent under-sizing issues in designing integrated energy�water systems. © 2022 by the authors.