PEM water electrolysis and Power-to-X systems are seen as potential technologies to achieve GHG emission reductions and limit the global warming to 1.5 °C above pre-industrial levels. Moreover, Power-to-X systems are also seen as a solution to balance electricity grid in the case of higher share renewable energy production which would increase the intermittent energy production. One technology cannot solve all problems but hydrogen has already versatile end-use applications and potential to make significant reductions in CO2-emissions in energy sector, limiting the global temperature rise. Thesis first introduces the hydrogen as an energy carrier. Hydrogen properties, main production methods, delivery and end-use applications are examined. PEM water electrolysis fundamentals, technology and operation strategies with the most significant factors impacting the viability are presented. PEM hydrogen production costs are also compared with SMR and alkaline electrolysis production methods. Power-to-X pathways that can be considered potential for PEM electrolysis are introduced and also recent notable projects are presented. In practical part, thesis is divided into a technical evaluation of the pilot scale PEM electrolysis operation and economic calculations of feasible operation frameworks for PEM electrolysis in Finland. First, working principal of the electrolyser, auxiliary equipment and monitoring systems are introduced. For the economic calculations, the calculation parameters to find suitable economic operation framework are presented. Three different electricity price scenarios based on realized hourly prices in Finland 2018 and in Denmark 2018 were used. One of the scenarios used optimistic lower average electricity price with higher volatility modified from the Finland 2018 scenario. Other necessary parameters were gathered from the literature. Results from the operation of the pilot scale PEM electrolyser showed excellent dynamic properties and stable, independent hydrogen production. Challenges came from low ambient temperatures which impacted the cold start-up time. The economic calculations showed only Speculative 2030 with FCR-N scenario with optimistic assumptions to be feasible without raised hydrogen and oxygen prices. With higher products values, all scenarios became viable. The distribution of yearly costs and incomes for different scenarios showed that main incomes are due to hydrogen sells. Additional revenues from oxygen and heat utilization have significantly smaller but still relevant share of incomes. Also FCR-N operation proved to be beneficial in all scenarios but significance decreased as electrolyser utilization rate increased. Additionally, FCR-n market revenues are limited and auction based therefore future auctions are not guaranteed to offer same revenue for balancing services. Feasible electrolysis operation required high utilization rate, in which case costs were dominated by electricity costs other costs played smaller role.