This paper presents an investigation on simultaneous freshwater production and CO2 capture using the flue gases of a 500 MWe coal‐fired power plant. Generally, a fan/cooler is used to reduce the temperature of flue gas before flowing into the absorber column of a CO2 capture unit. It has been replaced with a heat exchanger in this study. Seawater and flue gas were passed through the heat exchanger to raise the temperature of seawater and reduce the temperature of flue gas. The high‐temperature seawater was subsequently fed into a membrane distillation (MD) unit for freshwater production. The cold flue gas was directed to the CO2 capture unit. The heat exchanger and CO2 capture unit were modeled with Aspen Plus software. Whereas MATLAB software was used to develop and solve the MD mathematical model software for freshwater production. The seawater flow rate was varied from 4000 L/min to 7000 L/min in the heat exchanger. As a result, the flue gas (flow rate 781.6 t/h) and the outlet seawater temperatures were reduced from 27.498 to 22.360°C and 73.384 to 52.670°C, respectively. However, higher inlet seawater temperature in the MD unit produced more freshwater. An increase in inlet seawater feed temperature in the MD unit from 52.670 to 73.384°C increased the freshwater production from 211,956.5 to 299,244 L/day. Furthermore, the CO2 capture process has been analyzed by varying the methyldiethanolamine (MDEA) and piperazine (PZ) concentrations in weight% (45 and 5, 40 and 10, 35 and 15, and 30 and 20, respectively). It was observed that the energy requirement reduced from 3.55 to 3.26 MJ/kg CO2 by increasing the PZ content from 5 to 20 wt.%. At 15 and 20 wt.% of PZ content in the blended solution of MDEA/PZ, the energy required to regenerate the solvent was 3.31 and 3.26 MJ/kg CO2, respectively. PZ emissions from the absorber were also increased with the raising of PZ content in the blended solution. The energy requirement was not much higher at 15 wt.% than 20 wt.%. Therefore, MDEA/PZ solution (15/35 wt.%) was considered an optimal concentration. The reboiler duty was reduced up to 3.25 MJ/kg CO2 at 15/35 wt.% concentration with stripper pressure of 2.3 bar. © 2022 Society of Chemical Industry and John Wiley & Sons, Ltd.