A scenario based entirely on renewable energy with possible use of hydrogen as an energy carrier is constructed for a group of North European Countries. Temporal simulation of the demand-supply matching is carried Out for various system configurations. The role of hydrogen technologies for energy storage and fuel cell applications is studied and applied to both stationary energy use and transportation sectors. As an alternative, biofuels may take the role of hydrogen both as a storable fuel and for direct use in the transportation sector. It is shown that there is scope for considerable amounts of energy trade between the Countries, due to the different endowments of different countries with particular renewable energy Sources, and to the particular benefit that intermittent energy sources, such as wind and solar, can derive from exchange of power. The establishment of a smoothly functioning renewable energy Supply system is demonstrated with the use of the seasonal reservoir-based hydrocomponents in the northern parts of the region. The outcome of the competition between biofuels and hydrogen in the transportation sector is dependent on the development of viable fuel cells and on efficient technologies for converting biomass residues to fuels. Copyright (C) 2007 John Wiley & Sons, Ltd.