The effect of light on algae
Algae, like higher plants generally need light for photosynthesis (there are only a few exceptions where some protozoan algae can live without photosynthesis).
Algal blooms
Too much light can contribute to too much algae (undesirable blooms) if other conditions such as nutrient levels, streambed type and flow regime allow. The removal of shade-producing riparian vegetation is therefore one factor that contributes to the likelihood of undesirable blooms.
Algae in the food chain
Natural bush-covered streams have quite low light levels and they tend to support low algal biomass, but these habitats can still support a range of beneficial algae (often thin diatom films) that provide food for freshwater invertebrates (often grazing mayfly nymphs), which in turn provide food for fish.
The artificial shading of streams through piping eliminates almost all algae from that section of stream. This prevents algae from providing food for grazing invertebrates, and it prevents algae from performing their natural “decontamination service” (the uptake of nutrients and other contaminants from the water column).