Is the valve in the picture a fill valve? And if so, does its use require loosening the screw at the top?
That is the drain valve and you only need to use it in the event that you should have to drain or empty your water heater. It is opened and closed by turning the screw on the top of the valve.
Reasons for draining may be to flush your water heater out or to empty it in order to remove or service it, or if you do not have any other drain valve for your house and you need to empty any hot water plumbing above the water heater for repairs.
If you are draining it you need to shut off the water supply line that feeds into the water heater before you open the drain valve or water from the city supply line will continue to replace the water that is being evacuated through the drain valve. Once you open the drain valve ( and close the supply line valve ) the water will not drain until you release the vacuum by opening a faucet upstream or the pressure relief valve on the water heater.
**Always turn off the water heater before emptying it**.