When the water is stored high above the turbine, it has potential energy (the energy of position).
As the water falls, its potential energy is converted into kinetic energy (the energy of motion).
When the water hits the turbine blades and gets them spinning, its kinetic energy is converted into the kinetic energy of the spinning turbine.
The spinning turbine is connected to a generator, which converts the kinetic energy of the turbine into electrical energy.
