Energy storage to reduce peak-load demands on utilities is emerging as an important way to address the intermittency of renewable energy resources. Wind energy produced in the middle of the night may be wasted unless it can be stored, and conversely, solar energy production could be used after the sun goes down if we had an efficient way to store it. It is uses an electrochemical process to convert hydrogen gas into electricity. The role of fuel cells in energy storage is a very important criteria and it is compared with regular batteries for the advantages of fuel cells over the latter. For this reason fuel cells can be employed. PEM fuel cells can be effectively used for this reason. But the performance and durability of PEM fuel cells are significantly affected by the various components used in a PEM cell. Several parameters affect the performance and durability of fuel cells. They are water management, degradation of components, cell contamination, reactant starvation and thermal management. Water management is the parameter which plays a major role in the performance of a fuel cell. Based on the reviews, improvement of condensation on the cathode side of a fuel cell is expected to improve the performance of the fuel cell by reducing cathode flooding. Microchannels and minichannels can enhance condensation on the cathode side of a fuel cell. Computational fluid dynamics (CFD) analysis was performed to evaluate and compare the condensation of steam in mini and microchannels with hydraulic diameter of 2mm, 2.66mm, 200�m and 266�m respectively. The simulation was run at various mass flux values ranging from 0.5 kg/m<
sup>
2<
/sup>
s and 4 kg/m<
sup>
2<
/sup>
s. The length of the mini and microchannels were in the range of 20 mm to 100 mm. CFD software?s GAMBIT and FLUENT were used for simulating the condensation process through the mini and microchannels. Steam flowed through the channels, whose walls were cooled by natural convection of air at room temperature. The outlet temperature of the condensate was in the range of 25�C to 90�C. The condensation process in minichannels was observed to be different from that in microchannels. It was found that the outlet temperature of the condensate decreased as the diameter of the channel decreased. It was also evident that the increase in length of the channel further decreased the outlet temperature of the condensate and subsequently the condensation heat flux. The investigation also showed that the pressure drop along the channel length increased with decreasing hydraulic diameter and length of the mini and micro channel. Conversely, the pressure drop along the channel increased with increasing inlet velocity of the stream. It was then suggested to use microchannels on the cathode section of a fuel cell for improved condensation.