Beakman explains that construction equipment is "strong" because of hydraulics. He demonstrates that when you try to compress a liquid, it has a limit. Pascal's principle says that the pressure is the same everywhere in the liquid so if you open the end of the syringe, then the liquid is forced out. Using this, they show how Liza can push down on one hydraulic shaft and this will cause the rat to be lifted. Basically, she does more work with less energy.
Beakman explains that water doesn't turn into electricity but instead the hydraulic energy creates electricity using dams. He explains how dams work. A river has kinetic energy so when it hits the dam, it can use that to move the turbines which then create electricity.