Anthropogenic heat emissions into inland waters influence water temperature and affect stratification, heat and nutrient fluxes, deep water renewal, and biota. Given the increased thermal stress on these systems by growing cooling demands of riparian/coastal infrastructures in combination with climate warming, the question arises on how to best monitor and manage these systems. In this study, we investigate local and system‐wide physical effects on the medium‐sized perialpine Lake Biel (Switzerland), influenced by point‐source cooling water emission from an upstream nuclear power plant (heat emission ∼700 MW, ∼18 W m−2 lake wide). We use one‐dimensional (SIMSTRAT) and three‐dimensional (Delft3D‐Flow) hydrodynamic numerical simulations and provide model resolution guidelines for future studies of thermal pollution. The effects on Lake Biel by the emitted excess heat are summarized as: (i) clear seasonal trend in temperature increase, locally up to 3.4°C and system‐wide volume mean ∼0.3°C, which corresponds to one decade of regional surface water climate warming; (ii) the majority of supplied thermal pollution (∼60%) leaves this short residence time (∼58 days) system via the main outlet, whereas the remaining heat exits to the atmosphere; (iii) increased length of stratified period due to the stabilizing effects of additional heat; (iv) system‐wide effects such as warmer temperature, prolonged stratified period, and river‐caused epilimnion flushing are resolved by both models whereas local raised temperature and river short circuiting was only identifiable with the three‐dimensional model approach. This model‐based method provides an ideal tool to assess man‐made impacts on lakes and their downstream outflows.