Yes, it seems like using a seaside cliff would have several advantages over a freshwater solution, not the least of which is an unlimited water supply in the lower reservoir.
I guess the problem is scale, after all. I'm quite bad at physical calculations, so the below may be wrong.
Even a small hydroelectric dam generates gigawatts of power. Assuming a 30 meter tall cliff, each cubic meter of water generates 294 kJ when descending. To produce 1 GW of power, we would need 1,000,000/294=3400 cubic meters of water descending every second (watt = joule/second).
If we build a lake at the top, 10 meters deep and 1 kilometer on a side, it would contain 10 million cubic meters of water. If we run it at 1GW, it would be emptied after 49 ...
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