It is examined that the technical feasibility, economics of hydrogen, improvement of the load factor and reduction of the carbon dioxide emission in the case where a hydrogen-refueling infrastructure is developed using the off-peak power in the existing electrical power grid in Japan. Hydrogen could be supplied to the fuel cell vehicles, of which cost would be almost the same as the current retail cost of gasoline exclusive of tax. Annual average load factor of 0.72% could be increased in 2020 to meet the hydrogen demand for the fuel cell vehicles in Japan by water electrolysis. The infrastructure cost of 0.12 trillion yen/year in 2020 would be necessary to be invested, which is almost the same as the reduction of annual expenses in the case where the increase of 1% in load factor could attain. Fuel cell vehicles using the electrolysis, hydrogen generated by the off-peak electricity could attain the 37% reduction of carbon dioxide emission compared with middle-sized internal gasoline combustion passenger cars. (C) 2003 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved.