Hydroelectricity. Hall in an underground hydroelectric power station. This is at the Manapouri power station in New Zealand. The hall is approximately 150 metres underground. Hydroelectric power is generated by piping water from a natural source, such as a lake or river, into turbines coupled to electricity generators. A hydroelectric power station may raise its generation rapidly just by allowing more water to flow. As such, these power stations are commonly used during peak demand times. Most of the power generated here is used by an aluminium smelting plant near the town of Bluff, some 160 kilometres from the facility.