Hydro-electricity is a renewable energy source that relies on the inflow of water into storage lakes upstream of a dam.

The largest dams in Aotearoa are for power generation. The controlled release of large torrents of water from dams provides the raw energy to spin electricity-generating turbines at some 80 power stations around the country. These stations have power generating capacities ranging from 1,000 Megawatts (MW) at Clyde, to less than 1 MW at small stations operated by local electricity supply companies.

The impact of a dam on river flows varies with the size of the dam and the river. Most hydro-electric dams in New Zealand are 'run of the river' schemes, with enough storage for only a few hours or days of generation. This means they do not necessarily modify the seasonal flow patterns but may cause large day-night fluctuations in response to varying power demands. Major disturbance of water flow can affect river channel stability, fish migration, and reduce fish habitat and spawning areas.