Globally, the hydropower (HP) sector has significant potential to increase its capacity by 2050. This study quantifies the energy and resource demands of small-scale HP projects and presents methods to reduce associated environmental impacts based on potential growth in the sector. The environmental burdens of three (50-650 kW) run-of-river HP projects were calculated using life cycle assessment (LCA). The global warming potential (GWP) for the projects to generate electricity ranged from 5.5 to 8.9 g CO2 eq./kWh, compared with 403 g CO2 eq./kWh for UK marginal grid electricity. A sensitivity analysis accounted for alternative manufacturing processes, transportation, ecodesign considerations and extended project lifespan. These findings were extrapolated for technically viable HP sites in Europe, with the potential to generate 7.35 TWh and offset over 2.96 Mt of CO2 from grid electricity per annum. Incorporation of ecodesign could provide resource savings for these HP projects: avoiding 800,000 tonnes of concrete, 10,000 tonnes of steel and 65 million vehicle miles. Small additional material and energy contributions can double a HP system lifespan, providing 39 to 47% reductions for all environmental impact categories. In a world of finite resources, this paper highlights the importance of HP as a resource-efficient, renewable energy system.