PEM electrolysis is a viable alternative for generation of hydrogen from renewable energy sources. Several possible applications are discussed, including grid independent and grid assisted hydrogen generation, use of an electrolyzer for peak shaving, and integrated systems both grid connected and grid independent where electrolytically generated hydrogen is stored and then via fuel cell converted back to electricity when needed. Specific issues regarding the use of PEM electrolyzer in the renewable energy systems are addressed, such as sizing of electrolyzer, intermittent operation, output pressure, oxygen generation, water consumption and efficiency. (c) 2004 Elsevier Ltd. All rights reserved.