Hydrogen as a clean energy carrier is frequently identified as a major solution to the environmental problem of greenhouse gases, resulting from worldwide dependence on fossil fuels. However, most of the world's hydrogen (about 96%) is currently produced from fossil fuels, which does not address the issue of greenhouse gases. Although there is a large motivation of the "hydrogen economy", for improvement of urban air quality, energy security, and integration of intermittent renewable energy sources, CO(2) free energy sources are critical to hydrogen becoming a significant energy carrier. Two technologies, applied in tandem, have a promising potential to generate hydrogen without leading to greenhouse gas emissions: 1) electrolysis and 2) thermochemical decomposition of water. This paper will investigate their unique complementary roles to reduce costs of hydrogen production. Together they have a unique potential to serve both de-centralized hydrogen needs in periods of low-demand electricity, and centralized base-load production from a nuclear station. Thermochemical methods have a significantly higher thermal efficiency, but electrolysis can take advantage of low electricity prices during off-peak hours, as well as intermittent and de-centralized supplies like wind, solar or tidal power. By effectively linking these systems, water-based production of hydrogen can become more competitive against the predominant existing technology, SMR (steam-methane reforming). (C) 2008 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved.