A planning application has been lodged for the UK's first commercial hydrogen balancing plant - the latest innovation in renewable energy, described as “a potential holy grail” when combined with wind energy.

The proposed £20million plant, near Kilbirnie in North Ayrshire, is seen as a radical solution to the intrinsic problem of wind farms - that they are intermittent, producing electricity only when the wind is blowing.

The plant will take excess electricity produced by a wind farm during times of low demand and use the power to separate the hydrogen out of water. The hydrogen is then stored in fuel cells. When wind speed drops, the hydrogen can be converted back into electricity and fed into the National Grid, thus allowing constant 24-hour energy supply.

Alternatively, it can be used to fuel hydrogen vehicles. The London Olympics are exploring the use of hydrogen powered buses.

This is the first such venture in Britain, although the technology is being used successfully in the US. The Welsh Assembly is also looking at the concept and Scottish politicians are known to be keen on a project that could help the country to reach its target for 50 per cent of energy to be derived from renewables by 2020.

The planning application comes in the same week as the use of hydrogen as domestic fuel was unveiled by a Sheffield-based company, with the concept of a home hydrogen refuelling station, which electrolyses water and would allow a household to run a car and fuel central heating and cooking on a carbon-neutral basis.

The prototype wind-hydrogen plant, part of the Ladymoor Renewable Energy Project, is designed by WHL Energy Ltd, which holds the patent for its use. It promises 60 jobs during construction and up to ten full-time jobs.

Last year WHL lodged a planning application for 24 turbines at the £40million Wings Law wind farm, 5km north of Kilbirnie, which has run into opposition from campaigners. WHL says it is vital to the financial viability of the scheme.

Steven Radford, WHL's managing director of UK operations, said: “This is a huge push forward on the argument about the intermittency of wind.

“The potential of wind-hydrogen balancing is enormous. It is a double win - you create a system which can react to demand, which wind alone can't, and you create vehicular fuel.”

WHL's hydrogen balancing facility won the UK Institute of Electrical Engineers' inaugural “New Spirit Challenge” sustainability award in 2002, for sustainable technology development in energy.

Jason Ormiston, chief executive of Scottish Renewables, the green energy trade body, said: “Combining energy storage technologies with renewable energy technologies will play an important part in helping to deliver energy security and significant cuts in carbon emissions in the decades to come.”

Bob Leitch, chief executive of Ayrshire Chamber of Commerce, said: “The project is different, it's the first in the UK, we hope it will be a success and will create a good balance of green and other energy which will work no matter how strong the wind is. It's a very special project and hopefully in the long term it will benefit the UK as a whole.

“Obviously that part of Ayrshire has had employment problems for a long number of years and this project will go some way to helping with that.”

Times Recommends

• How I lost the gift of joy for a while
• Why Ann Widdecombe has got it wrong
• Alas, it’s the end of the road for petrolheads