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When it comes to energy, chances are you have heard about hydroelectricity. But how does this type of energy technology work and how common is it in Australia?

What is hydroelectricity?

Hydroelectricity, also known as hydropower or hydro energy, is a type of renewable energy that converts the energy of moving water into electricity. Hydroelectric power is created when water from reservoirs, rivers, waterfalls is channelled through water turbines. More than 160 countries generate some level of their electricity through hydropower.1

In 2020, hydroelectricity was one of Australia’s top three sources of renewable energy (along with solar and wind).2 Six per cent of all renewable energy generated in this period was through hydro.2

How hydroelectricity works

Hydroelectricity is generated when a flow of water – usually from hydroelectric dams – is passed through turbines that can generate electricity. When the water moves through the turbine blades, it causes them to rotate, allowing the generator to convert the motion into electricity (hydropower).

Step-by-step guide of how hydroelectric power generation works:

  1. At hydroelectricity power plants (also known as hydropower plants or hydro power stations), water is typically stored in an upper reservoir or hydroelectric dam.
  2. Through penstocks, the water is released through turbines and into a lower hydroelectric dam. During this process, water causes the turbine blades to spin.
  3. As the turbine spins, they convert the motion into renewable electrical energy.
  4. The renewable energy generated can either be used immediately or stored and used when demand is higher, using Pumped Hydro Energy Storage (PHES).3 More on this later.

See how it works in the hydroelectricity diagram below.

hydroelectricity diagram
Source: AER

What hydroelectricity is used for

Like natural gas, solar power or even nuclear power, hydroelectricity is another energy source that can power homes and businesses across Australia. So essentially, if your home or business uses any amount of electricity, there’s a chance it’s been generated through hydropower.

Hydroelectricity in Australia

According to the government’s Renewable Energy Agency, there are more than 120 hydroelectricity power plants in Australia, which generate between 5 and 7% of the country’s total electricity supply.4 There are both big and small hydro plants in Australia, capable of producing a combined 7,800 megawatts (MW) of electricity.1

Most of Australia’s hydroelectricity power stations are mainly located in the south east, where rainfall and elevation are the highest. However, hydroelectricity schemes are currently in New South Wales, Tasmania, Queensland, South Australia, Victoria and Western Australia.

The biggest hydroelectricity plant in Australia

The biggest plant is the Snowy Mountains Hydro-Electric Scheme which is located in New South Wales. It has an installed capacity of 3,800MW and includes 16 major dams, 5 above-ground power stations, 2 underground power stations and nearly 150km of trans-mountain tunnels.1 Around 50% of Australia’s total hydropower is generated by the Snowy Mountains Scheme.1

Jindabyne Dam as part of the Snowy Mountains Hydro Electric scheme in New South Wales

Construction has also begun on a new project at the Snowy Mountains, which will connect two existing dams, provide an additional 2,000MW of capacity and 350,000 megawatt-hours (MWh) of stored capacity.3 This could  power around 3 million homes a week when complete,5 with power to start being generated from 2025.6

Hydroelectricity powering Tasmania

Did you know that most of Tasmania’s electricity is generated through hydroelectricity generation?1 According to Geoscience Australia, the Tasmanian integrated hydropower scheme generates more than 2,600MW of electricity from 6 major water catchments, 50 major dams and lakes and 29 power stations.1

New investments in Pumped Hydro Energy Storage (PHES).

PHES systems are an important part of hydroelectricity production, as they allow excess electricity to be stored and used when electricity demand is high. They’re similar to solar storage batteries, which allow you to store excess electricity your solar panels produce and use it when it’s most convenient for you.

For the first time in 37 years, in 2021, The Australian Renewable Energy Agency announced funding for a new PHES system – which will join 3 major PHES systems that already feed electricity to the national electricity grid.1 The new system will be located at the old Kidston Gold Mine in North Queensland and will also support wind and solar energy.

The existing operations PHES plants are Wivenhoe, Tumut 3 and the Shoalhaven Scheme.7

How do PHES systems work?

While hydroelectricity itself is an important renewable energy source of electricity production, PHES systems are just as important. They work in allowing electricity to be stored and used when it’s needed most. Here’s how they work.

  1. Other renewable energy sources (wind or solar) pump water from a hydroelectricity dam to an uphill reservoir when demand for electricity is lower.
  2. When the demand increases (in peak times or when wind or solar isn’t generating enough electricity), the water is released from the upper reservoir.
  3. As water travels to the lower reservoir, it passes through a turbine and electricity is generated.8

How PHES systems work


Frequently asked questions

What are the advantages of hydroelectricity?

Today, being a renewable type of clean energy that doesn’t rely on fossil fuels, provides a multitude of benefits to electricity generation. Through utilising hydropower instead of other fuel sources we can see benefits that include:

  • minimal environmental impacts;
  • the reduction of greenhouse gas emissions, which can have strong positive impacts on climate change and global warming;
  • working in conjunction with other renewable energy types; and
  • lower maintenance and operation costs.

However, like anything, hydropower does have some disadvantages like high start-up costs, the dependence on rainfall to be successful and the time it takes to pump water back to the upper reservoir.

How do I switch my home to hydroelectricity?

Unfortunately, in Australia, if you are connected to the main electricity grid (as most households are), you will not be able to control the source of the electricity that is distributed to you. However, many electricity providers still allow you to select a green option plan. While this plan doesn’t mean you will receive green energy directly, it does mean the provider will purchase electricity from green energy solutions on your behalf. It generally means that the retailer will increase the proportion of renewable vs non-renewable energy which they supply to their customers.

Are all Australian hydroelectric power stations the same?

There are three types of hydro power stations in Australia, each which operates slightly differently. The most common are impoundment plants, which store water and release it to generate electricity.

Diversion plants force water to flow through canals to produce electricity. Similar to impoundment plants, electricity is generated when the water hits the turbine.

Lastly, pumped storage plants work like a battery and allow water to be stored and used as an electricity supply when electricity demand is higher (PHES systems). With this option, hydroelectricity can be stored.

Is hydroelectricity the largest source of renewable energy in Australia?

As of 2020, hydroelectricity was the third largest source of renewable energy in Australia. At 6% of total generation, it’s behind solar (9%) and wind (9%).2

Can I create my own mini hydroelectric power station my home?

It would be extremely difficult to build your own hydroelectricity plant at your home using water power, especially if you didn’t have a lot of land area or access to a dam, creek or other type of water. However, you may be able to invest in other types of renewable electricity, such as solar power.

Are hydroelectric dams bad for the environment?

While hydroelectricity doesn’t generate pollution, hydropower plants and facilities can have negative impacts on the environment. For example, building a new plant may cause damage or destruction to natural ecosystems, change water temperatures and impact wildlife. Similarly, harvesting the materials used to build a plant can produce emissions, which may affect the environment.9

Why is hydroelectricity renewable?

Hydroelectricity is considered a renewable energy source because it relies on the natural water cycle to generate electricity. While it does use turbines to convert energy, at its core, no fossil fuels are burnt to produce hydropower.

Compare electricity plans with us

If you’re looking for a new electricity plan or want one that offers green options, we’re here to help. Our electricity comparison service allows you to compare a range of plans and providers in minutes. It’s free and easy to use, so what are you waiting for?

Brett Mifsud, General Manager

Tips from our energy expert, Brett Mifsud

  1. Include green energy with your electricity plan to increase investment in renewables such as hydroelectricity.
  2. Check that the green energy you are purchasing is accredited to minimise your carbon footprint.
  3. If you’d like to be more energy conscious and reduce your electricity consumption, check out our guide to saving electricity.


  1. Australian Government Geoscience Australia – ‘Hydro Energy’ – Accessed 11/10/2021
  2. Department of Industry, Science, Energy and Resources – ‘Renewables’ – Accessed 05/11/2021
  3. Parliament of Australia – ‘Australian electricity options: pumped hydro energy storage’ – Accessed 11/10/2021
  4. Australian Government Australian Renewable Energy Agency – ‘What is hydropower?’ – Accessed 11/10/2021
  5. Snowy Hydro – ‘Project update – August 2020’ – Accessed 05/11/2021
  6. Minister for Finance: Leader of the Government in the Senate – ‘Joint Media release: Snowy 2.0 construction ramps up’ – Accessed 12/10/2021
  7. Parliament of Australia – ‘Australian electricity options: pumped hydro energy storage’ – Accessed 11/10/2021
  8. Australian Government Australian Renewable Energy Agency – ‘What is pumped hydro and how does it work?’ – Accessed 11/10/2021
  9. U.S Energy Information Administration – ‘Hydropower explained’ – Accessed 11/10/2021

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