How does a water dam increase the efficiency of a waterwheel

See explanation below.

Explanation:

The efficiency in this type of facility is increased by increasing the height of the water fall, in this way you will have more potential energy, which will become kinetic energy to move the wheel.

E = m*g*h

where:

m = mass of the water [kg]

g = gravity = 9.81[m/s^2]

h = elevation [m]

We can see that if we increase the height h, we increase the energy of the system.