Small run-of-river projects are free from many of the environmental problems associated with large-scale dam hydropower projects because they use natural river flow thus producing relatively little change in the stream channel and flow.

For run-of-river hydro projects, a portion of a river's water is diverted to a channel, pipeline, or pressurized pipeline (penstock) that delivers it to a waterwheel or turbine. The moving water rotates the wheel or turbine, which spins a shaft. The motion of the shaft can be used for mechanical processes, such as pumping water, or it can be used to power an alternator or generator to produce electricity.

A Typical Run-of-River Hydro Facility