Hydropower has been used since ancient times to grind flour and perform other tasks. In the mid-1770s, French engineer Bernard Forest de Bélidor published Architecture Hydraulique which described vertical- and horizontal-axis hydraulic machines. By the late 19th century, the electrical generator was developed and could now be coupled with hydraulics. The growing demand for the Industrial Revolution would drive development as well. In 1878 the world's first hydroelectric power scheme was developed at Cragside in Northumberland, England by William George Armstrong. It was used to power a single arc lamp in his art gallery. The old Schoelkopf Power Station No. 1 near Niagara Falls in the U.S. side began to produce electricity in 1881. The first Edison hydroelectric power plant, the Vulcan Street Plant, began operating September 30, 1882, in Appleton, Wisconsin, with an output of about 12.5 kilowatts. By 1886 there were 45 hydroelectric power plants in the U.S. and Canada. By 1889 there were 200 in the U.S. alone.

At the beginning of the 20th century, many small hydroelectric power plants were being constructed by commercial companies in mountains near metropolitan areas. Grenoble, France held the International Exhibition of Hydropower and Tourism with over one million visitors. By 1920 as 40% of the power produced in the United States was hydroelectric, the Federal Power Act was enacted into law. The Act created the Federal Power Commission to regulate hydroelectric power plants on federal land and water. As the power plants became larger, their associated dams developed additional purposes to include flood control, irrigation and navigation. Federal funding became necessary for large-scale development and federally owned corporations, such as the Tennessee Valley Authority (1933) and the Bonneville Power Administration (1937) were created. Additionally, the Bureau of Reclamation which had began a series of western U.S. irrigation projects in the early 20th century was now constructing large hydroelectric projects such as the 1928 Hoover Dam. The U.S. Army Corps of Engineers was also involved in hydroelectric development, completing the Bonneville Dam in 1937 and being recognized by the Flood Control Act of 1936 as the premier federal flood control agency.

Hydroelectric power plants continued to become larger throughout the 20th century. Hydropower was referred to as white coal for its power and plenty.[9] Hoover Dam's initial 1,345 MW power plant was the world's largest hydroelectric power plant in 1936; it was eclipsed by the 6809 MW Grand Coulee Dam in 1942. The Itaipu Dam opened in 1984 in South America as the largest, producing 14,000 MW but was surpassed in 2008 by the Three Gorges Dam in China at 22,500 MW. Hydroelectricity would eventually supply some countries, including Norway, Democratic Republic of the Congo, Paraguay and Brazil, with over 85% of their electricity. The United States currently has over 2,000 hydroelectric power plants which supply 49% of its renewable electricity. There are different methods of generating electricity from water namely;The conventional method[generation by damming]:Most hydroelectric power comes from the potential energy of dammed water driving a water turbine and generator. The power extracted from the water depends on the volume and on the difference in height between the source and the water's outflow. This height difference is called the head. The amount of potential energy in water is proportional to the head. A large pipe (the "penstock" delivers water to the turbine. Another method is by pump storage:This method produces electricity to supply high peak demands by moving water between reservoirs at different elevations. At times of low electrical demand, excess generation capacity is used to pump water into the higher reservoir. When there is higher demand, water is released back into the lower reservoir through a turbine. Pumped-storage schemes currently provide the most commercially important means of large-scale grid energy storage and improve the daily capacity factor of the generation system.e.t.c. Some of the advantages also include flexibility,low power cost,reduce CO2 emission.e.t.c.Here are some of its disadvantages also,methane emission[from reservoir],siltation and flow shortage e.t.c. The ranking of hydro-electric capacity is either by actual annual energy production or by installed capacity power rating. Hydro accounted for 16 percent of global electricity consumption, and 3,427 terawatt-hours of electricity production in 2010, which continues the rapid rate of increase experienced between 2003 and 2009.

Hydropower is produced in 150 countries, with the Asia-Pacific region generated 32 percent of global hydropower in 2010. China is the largest hydroelectricity producer, with 721 terawatt-hours of production in 2010, representing around 17 percent of domestic electricity use. Brazil, Canada, New Zealand, Norway, Paraguay, Austria, Switzerland, and Venezuela have a majority of the internal electric energy production from hydroelectric power. Paraguay produces 100% of its electricity from hydroelectric dams, and exports 90% of its production to Brazil and to Argentina. Norway produces 98–99% of its electricity from hydroelectric sources.

There are now three hydroelectric plants larger than 10 GW: the Three Gorges Dam in China, Itaipu Dam in Brazil, and Guri Dam in Venezuela.

A hydro-electric plant rarely operates at its full power rating over a full year; the ratio between annual average power and installed capacity rating is the capacity factor. The installed capacity is the sum of all generator nameplate power ratings.