Generally there are some small or micro hydro elelectric system type as following:
Off-Grid Battery-Based Microhydro-Electric Systems
Most small off-grid hydro systems are battery-based. Battery systems have great flexibility and can be combined with other energy sources, such as wind generators and solar-electric arrays, if your stream is seasonal. Because stream flow is usually consistent, battery charging is as well, and it´s often possible to use a relatively small battery bank. Instantaneous demand (watts) will be limited not by the water potential or turbine, but by the size of the inverter.
Off-Grid Batteryless Microhydro-Electric Systems
If your stream has enough potential, you may decide to go with an AC-direct system. This consists of a turbine generator that produces AC output at 120 or 240 volts, which can be sent directly to standard household loads. The system is controlled by diverting energy in excess of load requirements to dump loads, such as water- or air-heating elements. This technique keeps the total load on the generator constant. A limitation of these systems is that the peak or surge loads cannot exceed the output of the generator, which is determined by the stream´s available head and flow. This type of system needs to be large to meet peak electrical loads, so it can often generate enough energy for all household needs, including water and space heating.
Grid-Tied Batteryless Microhydro-Electric Systems
Systems of this type use a turbine and controls to produce electricity that can be fed directly into utility lines. These can use either AC or DC generators. AC systems will use AC generators to sync directly with the grid. An approved interface device is needed to prevent the system from energizing the grid when the grid is out of action and under repair. DC systems will use a specific inverter to convert the output of a DC hydro turbine to grid-synchronous AC. The biggest drawback of batteryless systems is that when the utility is down, your electricity will be out too. When the grid fails, these systems are designed to automatically shut down.
But about your technical question :
1-A dump load is used for electrical energy producing and consumption balancing. it is an electrical resistance heater that must be sized to handle the full generating capacity of the microhydro turbine. Dump loads can be air or water heaters, and are activated by the charge controller whenever the batteries or the grid cannot accept the energy being produced, to prevent damage to the system. Excess energy is "shunted" to the dump load when necessary.
2- Inverters transform the DC electricity stored in your battery bank into AC electricity for powering household appliances. Grid-tied inverters synchronize the system´s output with the utility´s AC electricity, allowing the system to feed hydro-electricity to the utility grid. Battery-based inverters for off-grid or grid-tied systems often include a battery charger, which is capable of charging a battery bank from either the grid or a backup generator if your creek isn´t flowing or your system is down for maintenance.
In rare cases, an inverter and battery bank are used with larger, off-grid AC-direct systems to increase power availability. The inverter uses the AC to charge the batteries, and synchronizes with the hydro-electric AC supply to supplement it when demand is greater than the output of the hydro generator.
The function of a charge controller in a hydro system is equivalent to turning on a load to absorb excess energy. Battery-based microhydro systems require charge controllers to prevent overcharging the batteries. Controllers generally send excess energy to a secondary (dump) load, such as an air or water heater. Unlike a solar-electric controller, a microhydro system controller does not disconnect the turbine from the batteries. This could create voltages that are higher than some components can withstand, or cause the turbine to overspeed, which could result in dangerous and damaging overvoltages.
Off-grid, batteryless AC-direct microhydro systems need controls too. A load-control governor monitors the voltage or frequency of the system, and keeps the generator correctly loaded, turning dump-load capacity on and off as the load pattern changes, or mechanically deflects water away from the runner. Grid-tied batteryless AC and DC systems also need controls to protect the system if the utility grid fails.