The Department of Energy envisions the next generation very hightemperature gas-cooled reactor (VHTR) as a single-purpose or dual-purpose facility that produces hydrogen and electricity. The Ministry of Science and Technology (MOST) of the Republic of Korea also selected VHTR for the Nuclear Hydrogen Development and Demonstration (NHDD) Project. The report will address the evaluation of hydrogen and electricity production cycle efficiencies for such systems as the VHTR and NHDD, and the optimization of system configurations.Optimization of such complex systems as VHTR and NHDD will require a large number of calculations involving a large number of operating parameter variations and many different system configurations. The research will produce (a) the HyPEP which is specifically designed to be an easy-to-use and fast running tool for the hydrogen and electricity production evaluation with flexible system layout, (b) thermal hydraulic calculations using reference design, (c) verification and validation of numerical tools used in this study, (d) transient analyses during start-up operation and off-normal operation. This project will also produce preliminary cost estimates of the major components.