Hydropower, an important renewable energy source worldwide, is threatened by reservoir sedimentation. Ecological restoration (ER) can mitigate this by reducing upstream sediment, thereby extending hydropower facilities' lifespan. However, ER may also reduce runoff, potentially diminishing energy generation and complicating its overall impact on hydropower potential. Here, we examine China's Yellow River, once the world's most sediment-laden river, using eco-hydrological and reservoir regulation models to assess how large-scale ER influences the hydropower potential of the Xiaolangdi Reservoir, which controls 92.3% of the basin area. Our results indicate that, excluding upstream reservoirs' operations and socioeconomic water use, Xiaolangdi could generate a total of ~2.7×1011 kWh of energy before facing diminished flexibility and efficiency caused by the exhaustion of sediment storage—57.3% more than without ER—equating to an additional ~100 billion kWh. This enhancement in hydropower potential primarily arises from the extended lifespan, despite a 6.9% reduction in average annual energy generation. These findings advance our understanding of the ecosystem-water-sediment-energy nexus, offering valuable insights for integrated watershed management globally. By integrating the opposing effects through sediment and runoff changes, this study reveals that ecological restoration in the Yellow River Basin enhances hydropower potential, advancing our understanding of the ecosystem-water-sediment-energy nexus.