Electricity grids with a high penetration of fluctuating energy production from wind and solar energy sources bear a risk of electricity overproduction. A surplus of renewable energy can arise It times of high production when the energy volume cannot be absorbed by the electricity grid. Furthermore, the control of the stochastic power fluctuations has to be addressed since these will result in changes to grid stability. Producing hydrogen from excess electricity is one approach to solve these problems. This hydrogen can either be sold outside the electricity market, for instance as vehicle fuel, or re-converted into electricity, for instance as a means of controlling wind power output. This paper describes two different wind-hydrogen systems and analyses the ensuing costs of hydrogen per unit of energy service (i.e. kWh and Nm(3)). If hydrogen is to represent a practical fuel alternative, it has to compete with conventional energy carriers. If this is not possible on strictly (micro-) economic terms, at least a macro-economic calculation, in this case including all external costs of energy services, needs to show competitiveness. (C) 2006 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved.