The development of hydrogen fuel cells could net �500 million for the Scottish economy and sustain 10,000 jobs, according to a report published today.

The Hydrogen Energy Group (HEG) has set out its vision to the Forum for Renewable Energy Development in Scotland (FREDS) and made a number of suggestions on how Scotland can maximise the potential of the new technology.

Deputy First Minister Nicol Stephen, who also chairs FREDS, told the annual conference of the British Wind Energy Association in Glasgow: "I am committed to making Scotland the European powerhouse of clean, green energy and hydrogen fuel cells are increasingly seen as a major element of our energy future. "At the All-Energy conference in May I announced that an extra £1.5 million would be allocated to support the development of hydrogen and fuel cell projects in addition to funds already invested by the Intermediary Technology Institute (ITI).

"Today's report further highlights hydrogen's potential, not just for the development of renewable energy, but the impact it could have on Scotland's economy with the creation of thousands of jobs.

"I am determined to see further progress in this area and look forward to hearing more in the coming months." David Sigsworth, chairman of HEG, added: "Thanks to the members of the group from across the hydrogen and fuel cell sectors who produced this report. "We have identified that Scotland has the capabilities to make a unique contribution to the development of hydrogen and fuel cell technologies. "Our renewables potential allied to the research being undertaken in Scotland gives us the chance to develop technologies and systems which will have environmental and economic benefits.

"The report has already been successful in persuading the Executive to release funds to support hydrogen and fuel cells. I look forward to continuing this work to keep Scotland at the forefront of these technologies." A fuel cell is an electrochemical energy conversion device similar to a battery. However, it differs in that it is designed for continuous replenishment of the reactants consumed; i.e. it produces electricity from an external supply of fuel and oxygen as opposed to the limited internal energy storage capacity of a battery.

Hydrogen is not an energy source in its own right but an energy carrier like electrcity. It can be produced from a variety of resources like natural gas, methanol, or biomass. When produced from renewable energy, like wind, hydrogen has the advantage of being completely emissions free. Hydrogen can be used in three principal ways standard combustion engines gas turbines fuel cells Of these methods, fuel cells are the most attractive for renewable energy applications due to the high efficiency as well as the avoidance of pollutants.