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Senior Engineer Gregg Walker looks towards a "Picostream" floating turbine generator during installation in an old water mill.

HOOK, HAMPSHIRE - APRIL 04: Senior Engineer Gregg Walker looks towards a "Picostream" floating turbine generator during installation in an old water mill on April 04, 2023, in Hook, Hampshire. Amid persistently high energy prices and environmental concerns, interest has grown in alternative energy sources. While most of the attention is aimed at solar and wind energy, hydroelectricity is seeing an increase in available options. Founded by Henry Reily-Collins, the Fish Friendly Hydro Company is in the process of developing a floating hydropower turbine generator that can be installed in flowing water on residential and commercial properties, with their 1000-watt PicoStream producing the same amount of electricity in a year as a 40 solar panel array or a 4kW wind turbine. Designed specifically to have a very low impact on the ecology of the waterway, the turbine floats on the surface, meaning the river requires no harmful damming.

Credit: Leon Neal / Getty Images


Call to action:

Use alternative hydropower sources to supply clean power, boost local livelihoods and climate resilience, restore river ecosystems, and diversify renewable energy generation.

Alternatives to large-scale hydropower exist, including mini, micro, and pico hydro systems, which are often community-based and utilize the natural flow of water. Water has been harnessed for electricity since the nineteenth century, mostly using large-scale dams and river diversions that cause significant impacts to local communities and ecosystems. Today, much of the focus is on pumped storage hydro (PSH), which moves water from a lower reservoir to a higher one when electricity demand is low, thereby providing storage for energy generated by wind and solar arrays used to pump the water. However, PSH can have damaging effects on communities and ecosystems. Alternative hydro systems provide clean, reliable energy to communities, incentivize the restoration of rivers and watersheds, boost local livelihoods, and contribute to climate resilience. Although they have limitations, they can be an integral part of diversified, decentralized renewable energy (DRE) systems, complementing wind and solar.

Nexus Rating SystemBeta

Solutions to the climate emergency have unique social and environmental effects, positive and negative. To develop a broader understanding of the solutions in Nexus, we rate each solution on five criteria.

Sources for each Nexus are graded numerically (-3 through 10), and the average is displayed as a letter grade. You can explore each source in depth by clicking “view sources” below. For more information, see our Nexus Ratings page.


Reference Social Justice Culture Women Biodiversity Carbon
Achieving Indigenous consent for hydropower in Nepal 5.0 8.0
Social Impacts and Social Risks in Hydropower Programs 1.0 1.0
Controlling biodiversity impacts of future global hydropower reservoirs by strategic site selection -3.0
Addressing energy injustice in rural landscapes: Community leadership indigenous villages and micro-hydro diffusion in Indonesia 6.0
Navigating trade-offs between dams and river conservation 5.0 -2.0
First hydropower Standard signals a new era for the industry but must be strengthened to avoid mistakes of the past 0.0 0.0 -2.0
Closed-loop pumped hydro on the rise 5.0 5.0 -2.0
Purulia pumped storage project shows why pumped hydropower may not be clean 0.0 0.0 -2.0
Expert Interview: Dipti Vaghela Explains How Community-based Micro-Hydropower is a People Empowerment Energy Solution 5.0 4.0
Meet the Siblings Making Hydropower That Actually Protects Rivers and Fish 5.0 0.0
Indigenous people under threat from Asia clean energy push -1.0 -1.0
Community Mobilization for Energy Security 5.0 7.0
Pico Hydro-Powered Agricultural Mills in Nepal 6.0 6.0
Using Micro Hydro Power for Rural Off-grid Village Electrification. 6.0
Oxfam: German companies complicit in human rights violations -3.0 -3.0
Tackling Energy Poverty in Sarawak 2.0 2.0 -1.0
Micro-hydropower brings light to remote Afghan villages 5.0
Small Hydropower Plants Proliferation Would Negatively Affect Local Herpetofauna -2.0
The Same Coin:Hydropower Dams and the Biodiversity Crisis -3.0
As Small Hydropower Expands So Does Caution on Its Impacts 1.0 -2.0
The impacts of run-of-river hydropower on the physical and ecological condition of rivers -2.0
Small Hydropower - Project Drawdown 6.0
Small hydropower and Climate Change 7.0
The role of hydropower in achieving climate resilience 8.0
2.9 2.9 0.0 -1.9 7.0

Action Items


Learn about the history, pros and cons, and current trends in hydropower. Humans have harnessed the mechanical power of water for centuries, often by using waterwheels and tide mills for labor-intensive tasks such as milling grain and processing cloth. Waterpower was key to early industrialization. Advances in turbine technology in the nineteenth century marked the rise of hydropower as a source of electricity. The first hydroelectric dam was built in the United States in 1882. The second half of the twentieth century saw major growth in hydropower. Concern about the environmental and social impacts of dams led to decreased support for hydropower in the 1990s, but burgeoning demand for electricity in emerging economies recently has led to renewed expansion.

  • Hydropower is categorized according to its output capacity, measured in megawatts (Mw) and kilowatts (kW), as well as the mechanism used to generate electricity. Large hydro, such as dams and reservoirs, are generally more than 30 Mw. Community-based, small-scale systems, particularly those known as mini (100kW–1Mw), micro (5–100kW) and pico (up to 5 kW) hydro are alternatives that can benefit local populations and ecosystems by being combined with watershed management, land restoration, and economic empowerment.
  • Hydropower is the largest source of renewable energy globally, greater than all other forms combined. It accounts for 6.4 percent of the global energy mix and over 95 percent of global energy storage. Energy storage is critical in the transition to renewable energy because it enables power to be kept on the grid for use at a later time, when the supply of energy, such as wind and solar is low (see Energy Storage Nexus).
  • Impoundment is a system that uses a dam and a reservoir to release water through a turbine to power a generator. It was the first kind of hydroelectric power. Today the Three Gorges Dam in China is the largest of its kind, with a capacity of 22,500 Mw.
  • Dams are highly destructive for ecosystems and local communities. They disrupt aquatic habitats, dislodge populations, and worsen water quality. Dams and reservoirs fragment rivers, which has resulted in only 37 percent of free-flowing rivers over 1,000 kilometers long remaining in the world.
  • Most large-scale hydropower development is now in the Global South, particularly in areas of significant biodiversity, such as the Congo, Mekong, and Amazon River basins. Meanwhile, in the Global North, more dams are being removed than are being built.
  • Reservoirs are a source of methane, a potent greenhouse gas. A study estimated that reservoirs emit a billion tons of greenhouse gases a year— 1.2 percent of all GHGs—mainly through the decomposition of organic matter in the water that originated from surrounding forests and other sources.
  • The construction, operation, and maintenance of dams produce greenhouse gases, principally carbon dioxide.
  • The International Energy Association predicts that hydropower must grow 3 percent annually to achieve global net-zero targets by 2050. Meanwhile, the International Hydropower Association reports that there is a 300–600 Mw capacity gap that needs to be filled in order to limit global heating to 1.5C.
  • Drought and increased evaporation from reservoirs, amplified by global warming, reduce the generating capacity of hydropower. In 2021, hydropower generation decreased for the first time in two decades due to drought, with the crisis on the Colorado River a telling example.
  • Predicted growth in hydropower significantly threatens aquatic ecosystems and would fragment 260,000 kilometers of the world’s remaining free-flowing rivers. Much of this would occur in tropical rivers, which are critical hotspots for biodiversity, while providing a mere 2 percent of the renewable energy required by 2050.

Learn about pumped storage hydro and its pros and cons. Although large-scale dams are still being built, much of the focus of hydropower today is on pumped storage (PSH), a system that acts like a giant battery to “balance” energy grids. It addresses the intermittency issue of other renewable energies such as solar and wind. Half of new hydro installations in Europe and China are PSH. While carefully sited, off-river PSH generally avoids many of the impacts of large-scale dams, but it should not be seen as a panacea for growing global energy storage needs.

  • Pumped storage hydro uses two small reservoirs and functions like a giant battery by storing power generated by other renewable energy sources (see Energy Storage Nexus). When energy demand is low, it pumps water to an upper reservoir using the excess power, and then releases it into the lower reservoir when electricity demand is high, producing electricity with turbines.
  • Pumped storage can have devastating impacts on wildlife, water quality, and Indigenous communities, as in the case of the Yakama First Nation in the U.S. and the Purulia project in India.
  • Small-scale, closed-loop PSH systems, which don’t feed off a flowing body of water and constantly recycles water between reservoirs, can mitigate some of these impacts. The off-river Canyon Creek PSH facility in Alberta, Canada, is an example.
  • PSH can also be combined with other renewable energies to create multipurpose hydro projects, thereby avoiding new construction and optimizing existing infrastructure. Projects in Germany and Brazil have integrated floating solar panels in existing PSH facilities, benefiting from the cover they provide to reduce evaporation.
  • Site selection is critical and should avoid protected areas and Indigenous communities’ lands, while involving all stakeholders in the full life cycle of the project. Choosing decommissioned mines, brownfield sites, and existing reservoirs is also key. Underground PSH facilities utilizing abandoned mine sites are due to be built in Australia and Finland.

Learn about the pros and cons of alternative hydropower. Alternative hydro’s geographical limitations and relatively small generating capacity mean its role in the global transition to renewable energy should not be overstated. Furthermore, while alternative hydro is less environmentally damaging than large-scale hydro, if it were to proliferate in a single watershed the cumulative effects could be worse than large dams. However, with adequate policy and financial support, and with regulatory oversight, alternative hydro is a compelling means of deploying decentralized renewable energy to communities while boosting local climate resilience and providing socioeconomic empowerment.

  • Small-scale, run-of-river systems use small turbines placed in rivers or a diversion channel to harness the natural decline of a body of water. Although they don’t require reservoirs and instead capture energy from naturally flowing water, studies have shown that certain run-of-river systems can have negative impacts on freshwater ecosystems and reduce resilience to extreme weather. Projects with capacities greater than 1 Mw and with top-down models of ownership typically lead to these kinds of impacts, including water depletion, water quality degradation, and damage to wildlife habitat.
  • Community-based projects with smaller capacities and local ownership and management models, tend to avoid these kinds of impacts and even lead to net benefits for ecosystems and local populations.
  • Because small-scale hydro is dependent on thriving watersheds, their use in communities requires local action on reforestation, land restoration, and water management, which in turn boosts local resilience to climate change (See Agroforestry Nexus, Degraded Land Restoration Nexus, and Rainmakers Nexus). The use of pico hydro among the Danu people in Myanmar has incentivized environmental stewardship, including conservation and reforestation.
  • By providing reliable, clean energy, alternative hydro can have positive impacts on local livelihoods, including relieving people of physical drudgery and providing electricity for clean cooking stoves. Community-run micro-hydro projects in Afghanistan have enhanced local enterprises and replaced the need for toxic kerosene lamps.
  • These technologies often don’t require a battery and can easily be built, operated, and maintained locally. Although they use modern equipment, they are often inspired by traditional systems. This is the case in Nepal, where traditional water mills are being rejuvenated with more efficient pico hydro technology.
  • These systems are especially well suited to powering remote communities not connected to national grids, but they can also be a decentralized local energy solution for communities in urban areas. A version of micro hydro adapted to urban settings, called in-pipe hydro, uses turbines to generate power for local homes and businesses.

Support the shift to alternative hydropower where you live. As energy consumers, many of us can play a role in accelerating the shift away from destructive dams and toward alternative hydro projects.

  • Share knowledge about alternative hydropower with your family, friends, and communities. This online library and this blog page have a number of resources and case studies you can use.
  • If you have a body of water near your home or in your local area, installing a mini, micro, or pico hydro system could generate power for you and your wider community. Here and here are resources on how to design and build your own small-scale hydro systems.
  • Learn about and support dam removals in your country. Removing aging and obsolete dams can reconnect fragmented rivers and restore plant and animal life that depends on these aquatic ecosystems. Dam Removal Europe is working to restore fragmented rivers through knowledge sharing and funding support.
  • In some places, it’s possible to check how the hydropower you use affects people and the environment. Low Impact Hydro is an organization in the U.S. that certifies hydro projects that avoid or lessen their ecological and social impacts. 


Companies, Investors, and Insurers

Shift business to alternative hydropower. With the cost of solar and wind energy dramatically decreasing, and a generalized pivot away from high-impact dam projects, the role of hydropower is changing. Focusing your technical expertise and investment on small-scale, low-impact hydro is a future-proof and financially sound business choice. 

  • The private sector is increasingly engaged in the alternative hydro market. Smart Hydro has equipped rural communities in Peru, Nigeria, and Indonesia with affordable electrification powered by hydro systems that don’t disrupt river flow.
  • Approaches that simultaneously harness water to produce electricity and restore watersheds, wetlands, and rivers exist. Restoration Hydro is an increasingly cost-effective technique being pioneered by Natel Energy, which uses fish-safe turbines and engineered installations that mimic naturally occurring structures such as dams and rocks.
  • Investors should only support projects that meet the Hydropower Sustainability Standard, an international certification scheme and set of good practices inn low-impact hydropower launched in 2021. They should advocate for the Standard’s implementation and improvement, and ensure that local and Indigenous communities are fully integrated into all stages of any new hydropower project.
  • When selecting sites for pumped storage projects, those with minimal or even positive environmental and social impacts, such as brownfield and decommissioned mine sites, should be chosen. Investors and companies should also ensure that projects are off-river, closed-loop systems that can be integrated with other renewable energy infrastructure. This global atlas shows potential sites for off-river, closed-loop PSH around the world. 
  • Hydropower by design is a systems-wide approach to planning and managing hydropower projects at macro-basin scale, integrating elements such as water resource management and ecosystems modeling into the design process. It leads to lower-risk projects and a higher rate of return, while mitigating social and environmental impacts. This approach is being used in a project on the Coatzacoalcos River in Mexico.
  • Insurance companies who support high-impact hydro projects risk damaging their reputations due to increased scrutiny from regulators and opposition from affected communities. Here is guidance on how insurers can assess and manage the ecological, social, and financial risks posed by hydropower.

Engage in partnerships with Indigenous peoples and local communities to ensure that their rights and values are integrated into the full life cycle of hydro projects. Hydropower has historically violated Indigenous rights and territories, leading to loss of life and displacement. Companies, investors, and insurers should ensure free, prior, and informed consent of local and Indigenous communities, in line with the Hydropower Sustainability Standard, and involve them as partners and leaders in projects.

  • By partnering with multistakeholder groups, companies, investors, and insurers should ensure that hydropower projects are fully aligned with affected communities’ aspirations and include their participation in all stages, from design to construction and maintenance. With increasing scrutiny on the social and environmental impacts of hydropower, this approach will yield greater buy-in from local communities, avoid costly litigation, and ensure that projects achieve their desired objectives.

Development Banks and Agencies

Support alternative hydropower projects and divest from large-scale dams. Since 2003, 61 percent of World Bank–funded hydro projects were small, run-of-river systems. However, many of these projects have significant social and ecological impacts. Development banks and agencies should favor carefully sited, small-scale, community-driven projects with a capacity lower than 1 Mw, which integrate ecosystem regeneration, boost local livelihoods, and fully involve affected communities.

  • Endorse models like Social Enterprise for Energy, Ecological and Economic Development (SEED), which integrates small-scale hydro projects with ecosystem restoration and socioeconomic resilience. An EU-funded project has enabled the Kalasha Indigenous community in Pakistan to use community-owned micro-hydro grids combined with reforestation to boost climate resilience and provide reliable power to their villages.
  • Support community-built and operated small-scale hydro projects that provide power to isolated rural populations as well as economic and social empowerment. A United Nations Development Program project in the Democratic Republic of Congo is managed by a committee of local community members, has relieved women of physically demanding agricultural processing and manufacturing tasks, and boosted basic social services.
  • Partner with local private enterprises and provide credit to local banks to ensure hydro projects are community driven and create a sense of local ownership. Micro hydro projects are more likely to be sustainable if they function as local social enterprises, particularly because they can draw on strong local networks and community trust. Practical Action has partnered with local hydropower practitioners in Nepal to build 3,300 micro hydro systems, providing electricity for remote communities and boosting local livelihoods.
  • Divest from dams and large-scale systems. As well as having limited life spans and high repair costs, dams are becoming less competitive as the cost of other renewable energies decrease, and less efficient due to the increasing frequency of droughts.

Local Communities

Join the growing movement of communities harnessing alternative hydro. There is a growing global network of alternative hydro practitioners and organizations that would greatly benefit from volunteer and fundraising support.

  • The Hydro Empowerment Network has members from all over the world and provides a platform for knowledge sharing, advocacy, partnerships, and training. Get in touch with them, sign up for their newsletter, and explore their blog.
  • Create Borneo works with Indigenous communities to develop community-based micro hydro systems while incentivizing environmental stewardship.
  • The Yamog Renewable Energy Development Group uses a model of self-sustaining community development to empower rural villages in Mindanao, Indonesia, combining micro-hydro, solar power, and forest and river protection and management.
  • Remote HydroLight works with local manufacturers, engineers, and communities in Afghanistan to provide off-grid power using micro hydro systems.


Contribute to a better understanding of the impacts of alternative hydro. Although small-scale, alternative hydro is generally viewed as less detrimental to ecosystems than large-scale dams. In some cases, it can severely impact rivers and even decrease resilience to climate-related disasters. Researchers can help answer a critical question in this regard: What is the environmental impact per MWh of electricity generated? In other words, at what point do the impacts of small-scale projects approach the impacts of larger ones?

  • An investigation into devastating flooding in the Indian state of Uttakharand concluded that multiple small-scale hydro systems likely exacerbated damages and loss of life.
  • Impacts of projects that have capacities over 1 MW often have a model of ownership that is not community-based. Greater study is needed to fully understand these impacts and make recommendations accordingly to policymakers, companies, development actors, and financial institutions.


Map and assess the costs and benefits of different decentralized renewable energies (DREs). Governments typically rely on developers' preferences when deciding which projects to support. By weighing all options, including alternative hydro, biomass, wind, and solar, projects are likely to bring greater economic, ecological, and social benefits to the communities they serve. This article details some suggested criteria for mapping and assessment.

Clarify the regulatory framework and provide direct financial support for alternative hydro. The scaling up of decentralized mini, micro, and pico hydro has been hampered by a lack of regulation and funding. Government support for decentralized small-scale hydro in Nepal provides a model for best practices.

Provide tax incentives and fund research and development for alternative hydro. The government of Panama has used a series of tax exemptions to boost the expansion of small-scale hydro projects.

Use a systems-wide approach to planning and licensing for hydropower. Reconciling hydropower with climate and biodiversity targets requires projects that are low carbon, low cost, and low conflict with local communities and ecosystems. Costa Rica provides an example of how this can be achieved. Nearly 100 percent of its grid is made up of renewable energy, with hydropower used for balancing the grid, while avoiding impacts on ecosystems and local and Indigenous communities.

Implement and strengthen international hydropower sustainability standards. The San José Declaration on Sustainable Hydropower and the Hydropower Sustainability Standard are important frameworks for preventing the negative social and environmental impacts of hydropower, but they must go a step further. Policymakers should only support projects that conform to these standards and work to rigorously implement and improve them.

Focus hydropower policy on decentralized renewable energy (DRE). By focusing policymaking on DRE, some analysts believe that achieving Sustainable Development Goal 7 of providing reliable, renewable energy for all by 2030 is possible. With small-scale hydropower at their core, these diversified systems can provide cross-cutting benefits for local livelihoods and ecosystems. 

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