Run-of-the-river systems do not require a dam to back up water in a reservoir. Instead, they extract energy from the natural flow of water. A facility may chose to build a dam to help divert water onto an artificial course in order to supply enough moving water to exert adequate force on the turbines. Diverted water joins the natural flow downriver, thus, these systems have reduced environmental impact. If the water flow is more than can be used, gates open to allow passage of excess water.

In a pumped storage system, a special reservoir is created for water storage so that more electricity can be generated during times of peak demand. Excess generated electricity at times of lower demand is used to pump water back up into the special reservoir. When needed, water from the extra reservoir "recharges" the system. This helps provide power when people need it most. Pictured above, the Kinzua Dam in Pennsylvania is supplemented by the Seneca Pumped Storage Facility on the left-side of the picture.