Hydroelectricity is electricity generated by hydropower, i.e., the production of power through use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy. Once a hydroelectric complex is constructed, the project produces no direct waste, and has a considerably different output level of the greenhouse gas carbon dioxide (CO2) than fossil fuel powered energy plants. Worldwide, hydroelectricity supplied an estimated 715,000 MWe in 2005. This was approximately 19% of the world's electricity (up from 16% in 2003), and accounted for over 63% of electricity from renewable sources.

Although large hydroelectric installations generate most of the world's hydroelectricity, some situations require small hydro plants. These are defined as plants producing up to 10 megawatts, or projects up to 30 megawatts in North America. A small hydro plant may be connected to a distribution grid or may provide power only to an isolated community or a single home. Small hydro projects generally do not require the protracted economic, engineering and environmental studies associated with large projects, and often can be completed much more quickly. A small hydro development may be installed along with a project for flood control, irrigation or other purposes, providing extra revenue for project costs. In areas that formerly used waterwheels for milling and other purposes, often the site can be redeveloped for electric power production, possibly eliminating the new environmental impact of any demolition operation. Small hydro can be further divided into mini-hydro, units around 1 MW in size, and micro hydro with units as large as 100 kW down to a couple of kW rating.

Small hydro units in the range 1 MW to about 30 MW are often available from multiple manufacturers using standardized "water to wire" packages; a single contractor can provide all the major mechanical and electrical equipment (turbine, generator, controls, switchgear), selecting from several standard designs to fit the site conditions. Micro hydro projects use a diverse range of equipment; in the smaller sizes industrial centrifugal pumps can be used as turbines, with comparatively low purchase cost compared to purpose-built turbines.

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