According to HowStuffWorks, a cooling tower works by using a stream of cold water that is run over a heat exchanger to cool down the individual condenser coils. Some of the water in the stream is evaporated, which further cools the rest of the stream being run across the hot equipment. Some cooling towers have a single fluid circuit, while others use two circuits that never touch.
Cooling towers reject heat by extracting excess heat into the atmosphere. This is accomplished when the water stream is cooled with an evaporative method: some water evaporates and cools the rest of the water stream to a decreased temperature. However, this also means that cooling towers require the addition of water to replace that which has been lost to evaporation at regular intervals.
Unlike other forms of cooling technology that use air as the primary method of decreasing temperatures, cooling towers use water and are generally able to function on larger scales. Additionally, depending on external factors such as relative humidity and barometric pressure, cooling towers can provide a greater drop in temperature than air-based systems. Because the evaporative method can be easily generalized to different industries, cooling towers can be used for a variety of different applications, including air conditioning, manufacturing and electric power generation.