If intermittent renewable energy technologies such as those based oil solar, wind, wave and tidal resources are eventually to supply significant shares of total energy supplies, it is crucial that the energy storage problem is solved. There are several (long-recognised) possibilities ahead including compressed air, Pumped storage, further developments in batteries, regenerable fuel cells, 'super-capacitors' and so forth. But one that is being revisited extensively by industry and research establishments is the production and storage of hydrogen from electricity at off-peak times, and in times,when there Would be a surplus of renewable energy, for reuse in the electricity, gas and transport markets; short-term and even seasonal and longer-term storage is technically feasible with this option. This paper looks at the costs of the option both in the near-term and the long-term relative to the Current costs of electricity and natural gas Supplies. While the costs of hydrogen would necessarily be greater than those of natural gas (though not disruptively so), when used ill Conjunction with emerging technologies for decentralised generation and combined heat and power there is scope for appreciable economics in electricity Supply. A lot will depend on innovation at the systems level, and on how we operate our electricity and gas grids and regulate Our electricity and gas industries. We have also suggested that we now need to experiment more, at the commercial level, and in the laboratories, with the hydrogen option. (C) 2003 Elsevier Ltd. All rights reserved.