During the 11th and 12th centuries in Europe, water power was used for the first time to industrialize industrial processes. 
As indicated in my recent class lecture on medieval economics and technology, this created a medieval industrial revolution.1 As I wrote in my masters’ thesis years ago2, the most significant use of this technology was the fulling mill, which created the mass production of woollen cloth that fueled medieval economic expansion. What made this possible was the cam, a protrusion of the waterwheel shaft that could push a similiar protrusion on a hammer end up and down. This changes the natural rotary motion of the waterwheel shaft to reciprocal (back and forth) motion.
During the more popular Industrial Revolution of the 19th century, steam power was similarly used to turn a wheel (or turbine), either for rotary or reciprocal motion. Almost all forms of power use the same method invented in the Middle Ages. Your car has a camshaft that does just this to open and close valves in the engine. Even nuclear power plants, those consumers of highly dangerous nuclear fuels, use those fuels to turn a turbine for power.
What the nineteenth century steam engine did that was different, though, was make it possible for factories to be situated anywhere. Water, to be an efficient source of power, requires good velocity. Thus places with fast-moving, crashing waterfalls were better sources of power than towns with slow-moving rivers. As a result, the efficient water-power factories prior to the 19th century were situated where there was falling water, such as in mountainous or hilly areas. These regions were usually subject to higher elevations and colder winters, which would freeze the water and thus stop the mills. Steam powered factories, however, could be built anywhere and run year-round. Factories could move away from the rivers and to any location where it was convenient to ship in fuel (usually coal) and ship out manufactured goods. Towns sprung up around these locations, often, as we know, with horrendous living conditions as the result of lousy urban planning.
But power had become portable, for good or ill. As detailed in Nicolas Carr’s new book, the advent of electricity at the turn of the 20th century brought the construction of small power plants near urban factories or business buildings. Carr details how electric companies and innovators used economies of scale to provide electricity as a utility from big plants instead. Thus our world of coal, oil and nuclear power plants, run by utilities with power purchased by unit, began.3
In 2006, Google began building a massive computer complex at The Dalles, the U.S. heart of its plan for controlling information search technology around the world.
The Google complex is built in Oregon along the Columbia River. Carr points out that Google is the biggest challenger to Microsoft, whose main plant is located not all that far away in Redmond, Washington.
In addition to Carr’s thesis that Google’s plant is the beginning of providing internet service as a utility that will replace desktop software (and most of our hardware), what I find fascinating is the use of water. Google has deliberately built their plant at this location for similar reasons to medieval water mills, with a twist. The water power in this case is cheap hydroelectric power provided by the Dalles Dam, but the water itself is also needed for cooling the massive computer racks that would otherwise require massive amounts of electric air conditioning.3 The site contains two giant cooling towers for water, similar to a nuclear plant.
Thus, as we move into the future, we move back toward needed to site plants near rivers.
Sources:
1 Gimpel, Jean. The Medieval Machine: The Industrial Revolution of the Middle Ages New York, Penguin Books, 1977.
2 Lane, L. M. (1989). Problems in English textile history: Case studies in the techniques of medieval and early modern woollen manufacture. Thesis (M.A.)–University of California, Santa Barbara, 1989.
3 Carr, Nicholas. The Big Switch: Rewiring the World, from Edison to Google. New York: W. W. Norton, 2008.
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