Water energy was first pioneered by the Greeks and Romans from 300 B.C They used waterwheels to grind seeds to make flour. During the industrial revolution water wheels were used in the textile industry and in Australia waterwheels where used in the early 20th century in the production of gold.
Energy which comes from water is called hydro-electricity. Hydro electricity is becoming a prominent figure in the worlds energy source's. Brazil obtains 92% of it's power from hydro electricity. Australia only has 15% but is regarded to have one of the great hydro electricity systems in the world in Tasmania called the Snowy Mountain Scheme.
Although hydro electricity is an excellent source of energy it sill has some side effects. To set up a hydro electricity center you must clear a lot of vegetation which upsets ecosystems. This is the main reason why it has not been further developed in Australia but hopefully we can use our wide open spaces so this effect is non-existent.