The construction of a hydroelectric complex can cause significant environmental impact, principally in loss of arable land and population displacement. They also disrupt the natural ecology of the river involved, affecting habitats and ecosystems, and the siltation and erosion patterns. While dams can ameliorate the risks of flooding, dam failure can be catastrophic.

The largest power producers in the world are hydroelectric power stations, with some hydroelectric facilities capable of generating more than double the installed capacities of the current largest nuclear power stations.

Although no official definition exists for the capacity range of large hydroelectric power stations, facilities from over a few hundred megawatts are generally considered large hydroelectric facilities.

An underground power station is generally used at large facilities and makes use of a large natural height difference between two waterways, such as a waterfall or mountain lake. A tunnel is constructed to take water from the high reservoir to the generating hall built in a cavern near the lowest point of the water tunnel and a horizontal tailrace taking water away to the lower outlet waterway.

A simple formula for approximating electric power production at a hydroelectric station is:

Like other non-fossil fuel sources, hydropower also has no emissions of sulfur dioxide, nitrogen oxides, or other particulates.

Because large conventional dammed-hydro facilities hold back large volumes of water, a failure due to poor construction, natural disasters or sabotage can be catastrophic to downriver settlements and infrastructure.