For hydrogen injection into the natural gas grid a model has been developed to obtain a balance between production, demand and storage. Due to the relation between atmospheric temperature and natural gas demand, the variation in the gas demand is very large. Consequently, in case of a more or less constant mole fraction of hydrogen in natural gas the demand for hydrogen will also vary considerably. Injection of ten percent hydrogen into the natural gas (in The Netherlands) requires already the production of about two billion cubic meters of hydrogen per year. Considering the variation in demand, most probably large-scale storage of hydrogen is needed because the flexibility in production is limited for economic and technical reasons. On the other hand, storage of hydrogen will also increase the costs. In this paper, we report on the balance between hydrogen production, demand and storage. A number of variables for controlling the production will be taken into consideration. Also the possibility of production without a buffer will be discussed. (c) 2006 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved.