as long as the waterwheel has at least a 3X3 square of space with running water the waterwheel generator will produce 10 rf per tick.
the most effective method is to set it up so the water flows 8 blocks in both directions and to fill all spaces except for the the ends with waterwheels since the wheel itself does not count as a solid block it will not block other water wheels allowing for you to place them side to side and have them run with no issue. life blood
