Electrical energy generated by harnessing the power of moving - but not necessarily falling - water is referred to as hydroelectric power.

The fame of the hydroelectric generating stations at Niagara Falls, Grand Coulee and Boulder Dam have helped perpetuate the myth that hydroelectric energy is always produced by falling water. A converted grist mill set in the rapids of a small stream can also be a hydroelectric generator, although on a much smaller scale. Any steady current of water from a river or other waterway can be converted to electrical current.

Hydro, as most customers have come to call hydroelectric energy, is produced using the same basic principle as a simple grist mill, but with vastly improved efficiency. Hydroelectric generators direct the flow of water through massive turbine devices which are much more efficient at extracting the kinetic energy from the moving water and turning it into electricity through the rotation of electrical generators.

Hydroelectric energy is the most common source of electricity in the Canadian provinces of Newfoundland, Quebec and British Columbia, as well as in many western states. While hydro seems relatively clean and safe in comparison to coal-fired or nuclear energy, nearly all commercial hydro installations have significant effects on nearby habitats once they are brought online. They significantly slow the flow of water at the point where the generating facility is installed, and this causes significant rises in upstream water levels and significant drops downstream. Planners of new hydro facilities pay careful attention to minimizing environmental impact, but affected habitats have often suffered enormous damage from changes in water levels produced by these facilities. Habitats tend to adjust to new water levels over time, but they never fully recover. Thus the prospects for increased use of hydroelectricity are limited, and there are few remaining viable sites in North America where new hydroelectric generators would produce minimal environmental damage.

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