A small-scale hydroelectric generator has a micro-hydro axial-flow turbine mounted in a lower end of a penstock, preferrably of the siphon type, through which water is diverted from an intake basin. The turbine comprises a stator section formed with an axial core providing an annular passageway having an outlet end in close proximity to a rotor of a coaxial adjacent rotor section. The blades of the rotor have a length equal to the internal radius of the passageway. A plurality of flaps are arranged in an expandable circle between the stator section and rotor. A float mechanism located in the intake basin follows the water level and controls the extended positions of the flaps reducing the water flow through the penstock in a predetermined relation to the water level. The annular passageway has fixed vanes directing the stream of water in a helical swirling motion of predetermined pitch to impinge upon the blades which are disposed to receive the stream at an optimum angle of 90.degree. . The generator is located remote from the turbine with a closed hydraulic system comprising a variable displacement pump located at and driven by the turbine and a hydraulic motor located at and driving the generator. The pump has a flow control driving the motor at a constant RPM at all acceptable load conditions placed on the generator.