Fuel cells and batteries promise convenient, efficient power generation and energy storage if they can be developed as low‐cost, long‐lived systems. The efficiency of these devices can be higher than that for heat engines because they are not Carnot‐cycle limited. Fuel cells are under development for use as electrical substations, and as small‐scale power sources. The problem areas for these systems include the development of porous electrodes with good electrochemical activity, transport characteristics and long life, the evolution of new cell designs for high performance, and the identification of stable, inexpensive materials of construction. Rechargeable batteries offer an efficient means to store off‐peak electrical energy in utility networks, and propel automobiles, if they can be developed to have a low cost (∼$4–12/MJ) and a long life (∼3 yr). The major candidates are high‐temperature (350–400°C) batteries with problems in the areas of materials of construction, insulators, seals and electrode design.