Utilizing hydrogels to harvest salinity gradient energy from solutions of different salinities has recently attracted interest. Polyelectrolyte hydrogels exhibit cyclic swelling/deswelling when alternately exposed to freshwater and seawater. This can be utilized to convert the mixing energy of the two solutions into mechanical energy. Hydrogels consisting of a semi-interpenetrating network (semi-IPN) of poly(4-styrene sulfonic acid-co-maleic acid) sodium salt and polyacrylic acid was prepared at various cross-linking densities. The energy lost due to a pressure drop in the system during the deswelling/swelling process of these hydrogels is examined, and the effects of tubing dimensions, hydrogel cylinder size, gel particle size, and the volume fraction within the hydrogel cylinder occupied by the flowing liquid (ε) are investigated. In addition, a small-scale osmotic engine was compared to a scaled-up system. ε was found to be the factor that had the largest effect on the energy loss. It was found that ε is strongly dependent on the degree of swelling of the hydrogels. When the hydrogels swell, they deform more easily under pressure. This markedly decreases ε, thereby inducing a high pressure drop in the system and a correspondingly large energy loss. Accordingly, the pressure drop when pumping through the hydrogel is the major contributor to the energy loss in the system. When the hydrogel particles deform too much, the energy needed to pump the flowing liquid through the hydrogels exceeds the energy produced by the system. Developing a hydrogel system that deforms less in its swollen state is therefore essential for improving the energy efficiencies of these osmotic engines.