A necessary consequence of hydroelectric power generation is that the water in our drainage basins flows differently than it would under natural conditions. When water is removed from a drainage basin, the basin's physical parameters are altered.

The water volumes remaining in the rivers are often crucial in determining the extent of environmental effects incurred following the development of a hydroelectric project. Environmentally-sensitive operation of hydroelectric plants can make hydroeletricity a very environmentally sound form of energy (measured in kWh) when compared with other forms of energy production in terms of pollution reduction, biological diversity and land use.

Habitat modelling and the rehabilitation of drainage basins is an important topic in relation to hydroelectric projects.