Hydraulic potential stored in water reservoirs can be converted to useful power through the work of turbomachinery. However, nations around the world have large numbers of existing dams with hydropower potential left unused. These dams were mostly built during the latter half of the 20th century. At that time, thermal electric energy supply, generated with abundant cheap fossil fuels made small scale hydropower generation less attractive. Another reason for such low utilization of these clean renewable energy resources is the significant capital cost of equipment and hydropower plant construction. This made small hydropower development economically noncompetitive. With the rapid depletion of fossil fuel and the increased environmental and global warming concerns, it becomes highly desirable to harness clean renewable energy sources.To retrofit a conventional hydroturbine onto an existing dam brings out several major issues. They include structural integrity and safety of the dam, and the cost of construction and complex engineering tasks involved in properly integrating a powerhouse into the existing structure. These issues have seriously impeded the progress in developing these hydroelectric potentials. In addition, available data indicates that existing hydroturbine technology has some undesirable ecological impacts by causing injury and mortality to passing fish and deterioration of downstream environmental condition resulting from undesirable levels of dissolved gas.In this paper the authors will first briefly summarize current hydropower development needs and challenges, and then describe a new approach to effectively meeting these challenges by using an innovative hydroturbine system. The new hydroturbine system consists of four key design innovations: 1) an updraft flow arrangement, 2) a vertical pressure-balanced turbine flow control valve in place of the conventional wicket gates, 3) a divergent runner flow chamber serving the function of the draft tube, and 4) exit flow at the free surface in the tailwater terrace.