In this paper, a Computational Fluid Dynamics (CFD) code is used to investigate the tidal stream turbine performance under free surface condition and with surge motion: amplitudes of 1/24–1/4 rotor diameter and period of 3–12 s. The CFD model is evaluated against experiments of a piled turbine in a circulating flume, providing a difference of only 1.46% at rated TSR. The unsteady power and thrust follow the sum of a constant (similar to steady), velocity-induced, and acceleration-induced terms. In all tests, the damping term for the power response is approximately 3 times the steady power coefficient (Cp ∼ 0.33), whilst for the thrust, 1.6 times the steady thrust coefficient (Cz ∼ 0.77). Ignoring the small acceleration-induced coefficient leads to negligible simulation errors. Taken together, augmenting the surge amplitude and frequency increases the time-averaged and fluctuation of the power and thrust coefficient. Significant high- and low-pressure areas form around the blade edges, in function of the resultant velocity (sum of induced and inflow term), promoting peak and cavitation effects. From the ecological perspective, the induced-velocity develops a toroidal vortex near the wake, then mixes with the hub and tip vortexes, and propagates streamwisely toward the free surface. This effect is more pronounced with the surge amplitude rather than period, thereby exacerbating the wake deficit, and the wake structure is more sensitive to the variation of surge period so the restriction on the oscillation frequency should be considered as a priority in the designing phase. In the future, it will be important to explore the effects of blockage and depth immersion to assess extreme functioning and cavitation effects.