Error:
sqlalchemy.exc.DataError: (psycopg2.DataError) new encoding (UTF8) is incompatible with the encoding of the template database (SQL_ASCII)
HINT: Use the same encoding as in the template database, or use template0 as template.[SQL: CREATE DATABASE hydra ENCODING 'utf8' TEMPLATE template1]
(Background on this error at: http://sqlalche.me/e/9h9h)
Solution:
First, we need to drop template1. Templates can’t be dropped, so we first modify it so it's an ordinary database:
UPDATE pg_database SET datistemplate = FALSE WHERE datname = 'template1';
Now we can drop it:
DROP DATABASE template1;
Now its time to create a database from template0, with a new default encoding:
CREATE DATABASE template1 WITH TEMPLATE = template0 ENCODING = 'UNICODE';
Now modify template1 so it’s actually a template:
UPDATE pg_database SET datistemplate = TRUE WHERE datname = 'template1';
Now switch to template1 and VACUUM FREEZE the template:
\c template1
VACUUM FREEZE;
The problem should be resolved now.