The potential energy will go down because the water level in the final state is lower than in the initial state (aka some water has fallen). This provides the energy released. This energy will go into friction, thermal or turbulant losses, or could be used to drive a turbine.
If there isn't enough energy to ovecome these losses, (a more unusual situation), there will be not be enough flow to achieve the final state.
Whether it flows or not instantaioneously can be determined by resolution of forces, pressure of the water vs resistive forces.