The article discusses the importance of small hydro power plants in the Polish power system and defines the legal conditions for the operation of small hydro power plants. The phenomena occurring in the hydrological system of small hydro power plants and their impact on the natural environment were analyzed. An analysis of phenomena occurring in the hydrological system and the activity of small hydro power plants that are operating on the Radunia River helped us identify relations between different types of power plants working in cascades and possibilities of power generation control in period of several days. The above-mentioned analysis has been used in the development of a mathematical model of a hydroelectric plant and cascades of hydroelectric plants. The numerical simulations carried out concerned both the self-operating power plant and a cascade of two identical objects of this type. There is a possibility for small hydro power plant to run as a base load power plant and during periods of high demand as well (peak demand or unexpected loss of generation in the power system). A single hydroelectric power plant can deal with varying peak load demands while adding a second stage increase those abilities. A cascade of reservoir hydropower plants has a much greater ability to store energy and give it back in time. In addition, the existence of a second power plant equipped with a surge reservoir allows for a significant reduction in the amplitude of flows in the river below the cascade, which will reduce the negative impact of the cascade on the environment.