I think people over-estimate the power available from such locations. Those old water wheels probably only produced a few horsepower. which is just a few kW. The cost of building, connecting and maintaining a generator to deliver such a small amount of power to the grid would almost certainly not be economical these days.
Not quite true, the torque delivered through a waterwheel is immense, and produced with a relatively small amount of water. So yes, although the horsepower is small, the useable power is high, however the downfall of electric generation is that the low rpm of a waterwheel (or windmill, or archimedes screw...) has to be coverted to high rpm to generate power efficiently. There are now some very clever power output controllers out there that allow numerous constant variations in generation rpm (a large, but typical archimedean screw installation near us turns 250rpm at source, with around 16,000rpm at the generator.) Keeping the gearbox cool and running efficiently is one thing, but when .5rpm at source represents a few hundred rpm at the generator, in order to deliver a useable and constant electrical current a very sophisticated controller is required. The gearbox and controller on the installation mentioned represented about 1/5 of the cost of the whole plant!
A water driven plant is extremely difficult to make efficient at powers of 50Kw or less, which is out of the budget range of the majority of people on a quest for sustainable energy production.
It is interesting that a local company who specialise in the design and installation of water driven generating plant estimate that there are 400+ viable small generating sites in Cumbria alone.
However, until funding is available for this particular sector of small scale power generation (at least to a point matching the faddish and dated photovoltaic and to a lesser extent, wind power) the situation won't be changing any time soon. It is relatively easy to put together a fairly efficient plant from existing technology on a 'shoestring' budget (around £800 per Kw), but it takes time, and has been proven again and again the plant relies as much on a well engineered river site, properly controlled flow rate, and reliable and self cleaning termination and re-entry to the watercourse as it does on a well designed and installed plant.
It is a fascinating and inspiring niche in power generation, and one that used to be the only way people could produce large amounts of power for long durations- we can learn a lot from past technologies in using water power. Interestingly one of the longest and best known water power engineering firms in Europe- namely Gilkes of Kendal- supplied the water turbines for the bobbin mill behind our house over 150 years ago, and they are still at the leading edge of research and design of new water turbines.
An interesting point that heard on a programme a couple of years ago was that the super complex system of watercourses, dams, leats, pipelines, turbine halls and raceways installed in land of the Scots are used as back-up only when conventional power stations are struggling because they have the unique advantage of being able to run up to full power from zero rpm at the push of a button, and will run as long as required, then being able to be shut off as soon as they are not needed- something that is very difficult to do with any heat engine driven power plant as bands of efficiency require constant rpm and heat exchange in order to produce power at optimum efficiency, as well as keeping the machinery in as best possible condition.
Greg