In the WE-NET phase I project, a conceptual design of a total system, the energy balance, and the cost of electricity were verified, The performance of SPEM water electrolysis with a high efficiency of 90% was satisfied in the hydrogen production technology. The power generation system of hydrogen-fueled gas turbine with the thermal efficiency of 60% (HHV) and the demonstration test of the combustor, cooling blades were successfully carried out under a temperature of 1700 degreesC. In the WE-NET phase II project, distributed technology such as the hydrogen-refueling station and the metal hydride tank system for vehicle are being prepared for the field demonstration test. Besides, the fundamental technologies of safety measures and hydrogen production systems are also being developed. (C) 2001 Published by Elsevier Science Ltd on behalf of the International Association for Hydrogen Energy.