Hydrogen production by the electrolytic decomposition of water is simple, reliable, clean, and based upon scientific principles that were demonstrated in the early 1800s. However, water electrolysis has not been used extensively for hydrogen production because of the high cost of electric energy compared to natural gas or naphtha. Only where substantial amounts of low-cost hydroelectric power are available have economics favored electrolytic hydrogen; large electrolysis plants have located only at such sites. Smaller-scale applications of water electrolysis have resulted when the reliability and convenience of the modular technology or the high purity of the product was more important to the user than energy economics alone. Whether the use of electrolytic hydrogen will expand significantly in the future will be determined primarily by the relative cost of electric energy, fossil fuels (including coal), and possibly of thermal energy if thermochemical water splitting becomes a reality.