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Most of the hydropower in Canada is created when the stored potential energy of water in a reservoir behind a dam, is converted to kinetic energy (motion) as it falls through a penstock (pipes and or channels) to a turbine.  Mechanical energy is created as the blades of the turbine begin to spin due to the force of the water on them. The motion of the turbine's electro-magnets interacts with the coils of a generator to create electrical energy.  In some installations without a reservoir, known as run-of-river installations, the water isn’t stored, but passes through the penstock at the flow-rate of the river to create electricity in a similar process.  After the water has helped create electricity, it flows out to the river once more.

There are other forms of hydropower, which are not as prevalent in Canada. One form is Hydrokinetic, which simply uses a turbine placed in a river bed, tidal area or where there is wave activity to capture the energy from the river’s flow.  

Another is Pumped Storage, a closed loop system whereby water from a reservoir is drained through to a lower reservoir, passing through turbines to create electricity when there is peak demand.  When there is less demand for electricity, the water is pumped back up to the initial reservoir using off-peak electricity from other sources, such as wind energy