This paper deals with policies to meet the increasing energy demand for electricity and domestic heating in Turkey, Air pollutant emissions due to power generation and their harmful effects on the environment are also presented. We also argue in favor of small scale dams for sustainable development. Turkey has a total gross hydropower potential of 433 GW, but only 125 GW of the total hydroelectric potential of Turkey can be economically used. By commissioning of new hydropower plants (HPPs), which are under 10 construction, 36% of the economically usable potential of the country would be tapped. On the other hand, biomass (wood and wastes) energy is the second important renewable energy source for Turkey. In 1998, the biomass share of the total energy consumption of the country was 10%. In this study, the potential of important biomass energy sources and animal solid wastes of the country were determined. The effects of hydropower and biomass usage on the environment were also discussed. Considering the total cereal products and fatty seed plants, approximately 50-60 million tons per year of biomass and 8-10 million tons of solid matter animal waste are produced. and 70% of the total biomass is seen as possible to use for energy. Some useful suggestions and recommendations are also presented.