This paper investigates a possible long term investment path for the Nordic energy system focussing on renewable energy in the supply sector and on hydrogen as the main fuel for transportation, covering up to 70% of all transport in 2050. The optimisation model Balmorel [Ravn H, et al. Balmorel: A model for analyses of the electricity and CHP markets in the Baltic Sea Region. < www.Balmorel.com >; 2001. [1]] covering the Nordic energy system is used. The model has been expanded to include the modelling of hydrogen production technologies, storage and hydrogen power plants. The simulation shows that with an oil price at 100 $/barrel, a CO2 price at 40 (sic)/ton and the assumed penetration of hydrogen in the transport sector, it is economically optimal to cover more than 95% of the primary energy consumption for electricity and district heat by renewables in 2050. When the transport sector is converted as assumed 65% of the transportation relies on renewable energy. (C) 2008 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved.