The four essential conditions for the generation of hydroelectric power are : 1. There should be a perennial flow of large volumes of water. 2. The water should fall from a sufficient height. It may be in the form of a natural waterfall or a fall obtained by constructing a dam across the river. It may also be obtained by diverting the water from one river basin to another. 3. A readily available market is an essential requirement for generating hydroelectric power as electricity cannot be stored. 4. It also requires a huge capital investment as it is a capital intensive activity.