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It's in the name! Electricity! As mentioned below under, "How does it work?" we see that water flows to spin turbines and turn shafts that are connected to electric generator.

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Though this source is non-polluting, it does impact land use, homes and natural habitats. This could disrupt wildlife, and even alter the water temperature and flow.

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Though the fuel is based on water, this method does not reduce quantity of water. This source of renewable energy supports the use of other intermittent sources of renewable sources. This source also happens to promote guaranteed energy and price stability.  Also, an economic benefit of hydroelectricity is its cheap price compared to the other non-renewable sources.

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According to the Wisconsin Valley Improvement Company, Hydroelectricity power is produced on the average of $0.85 cents per kilowatt-hour. This is around 50% the cost of nuclear, 40% of fossil fuel, and 25% of natural gas.
http://www.wvic.com/content/facts_about_hydropower.cfm

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Simply put, hydroelectricity works as flowing water spins the turbine which then turns the shaft that is connected to the electric generator.

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Video Description on Hydroelectricity (1 min 16 sec)

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Video Description on Hydroelectricity (1 min 16 sec)

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Renewable Energy 101: How Does Hydroelectricity Work?