This study investigates the stability of nickel-impregnated scandia-stabilize zirconia composite electrodes during isothermal annealing at temperatures from 600 to 950 • C in a humidified hydrogen atmosphere (3 vol % water vapor). Typically an initial rapid degradation of the electrode during the first 17 h of annealing is revealed by both an increase in polarization resistance and a fall in electronic conductivity. Secondary electron images show a shift in nickel particle size toward larger values after 50 h of annealing. The declining electrochemical performance is hence attributed to nickel coarsening at elevated temperatures. Nickel coarsening has two microstructural effects: breaking up nickel percolation; and reducing the density of triple phase boundaries. Their impact on electrode area specific resistance is explored using a physical model of electrode performance which relates the macroscopic electrochemical performance to measurable microstructural parameters. The solid oxide fuel cell (SOFC) offers both high conversion efficiency and low environmental pollution.1 When combined with a bottoming gas turbine generator, the resulting hybrid (SOFC-GT) system is capable of reaching 70% electrical efficiency.2,3 The typical operational temperature for an SOFC is in the range of 600• C to 1000 • C, depending on the design and the materials employed. Such high temperature operation makes it possible to use not only hydrogen, but also reformed hydrocarbon fuels, or even unreformed hydrocarbons (direct operation) if nickel-free anodes are employed.4,5 By recovering the waste heat, SOFCs can be used as a combined heat and power (CHP) unit with high electrical and total efficiencies. 6,7 At the SOFC anode, gaseous fuel molecules are oxidized by the oxide ions O 2− transported through the electrolyte, giving out electrons to an external circuit.8 Nickel-yttria-stabilize-zirconia (YSZ) cermet is the most widely-used SOFC anode material due to its low thermal expansion coefficient mismatch with the electrolyte 9 and the high electro-catalytic activity of nickel.10,11 8 mol% YSZ has an oxygen ionic conductivity of 0.164 S cm −1 at a temperature of 1000• C. 12 In comparison, 12 mol% scandia-stabilize-zirconia (ScSZ) has a higher conductivity of 0.300 S cm −1 at 1000 • C 13 and is preferable to YSZ for SOFCs working in the lower range of SOFC operating temperatures. 14,15 Conventionally nickel-based anodes are fabricated by mixing powders of NiO and the chosen ionic conductor and then reducing the NiO to Ni on first use of the cell. However, impregnation of a soluble nickel salt into a preformed ionically conducting porous skeleton has been investigated as an alternative fabrication technique because it gives a finer dispersion of Ni particles on reduction. 16,17 This has also been shown to be more redox stable.18 Impregnation has been shown to produce electrodes with superior electrochemical performance compared to the conventional route. For example, impregnating La 0.9 Sr 0.1 Ga 0.8 Mg 0.2 O 3-d (LSGM) with nickel pr...