The development of a methodology for urban flood adaptation and energy recovery solutions is resting on the concept of Sustainable Urban Drainage Systems (SUDS) as a measure to reduce risks of urban flooding while fully utilizing the available resources. Flood drainage systems are infrastructures essential in urban areas, which include retention ponds that can be used as water storage volumes to damp floods and simultaneously to produce energy, constituting innovative solutions to be integrated in future smart water grid's designs. The consideration of urban flooding as a problem caused by excess water that can be harvested and reused is expected to provide a comprehensive representation of a water-energy nexus for future urban areas. The study comprises an optimization of energy recovery in SUDS of a small district area of Lisbon down-town through the use of a low-head hydropower converter. The status-quo solution based on a basin catchment for the average expected runoff is analysed, with influence of the tidal backwater effect of the Atlantic Ocean which causes difficulties to the drainage of excess flow. The methodology used to reach the flow damping and the optimized solution for energy production is presented.