Firm power in the Iberian Peninsula: Power system dynamics under high penetration of renewable energy

Ensuring a reliable electricity supply based predominantly on variable renewable energy requires new approaches to system design and flexibility provision. Firm power has emerged as a fundamental strategy for a transition to fully renewable electricity supply, relying on deliberate overbuilding of VRE capacity and the proactive curtailment of excess generation when it cannot be absorbed by the system. This paper evaluates firm power strategies under different configurations in a fully decarbonized Iberian Peninsula power system for 2050, using the open-source power system optimization model PyPSA-Eur. A range of scenarios is evaluated, including cases with and without hydropower and limited natural gas generation, in order to characterize the system dynamics and interplay between different technologies. The results show that low-cost firm power in Iberia can be achieved primarily through a combination of solar-dominated variable renewable energy overbuilding and storage, complemented by existing flexibility resources. In the cost-optimal configuration, the LCOE reaches €58/MWh when a small amount of natural gas generation is allowed, increasing by only 7% when natural gas is completely removed. To assess the robustness of hydropower as a flexibility resource, years with contrasting precipitation levels are compared. The analysis shows that dry conditions require approximately 25% more battery storage than high-precipitation conditions, while having a negligible impact on the required generation capacities and increasing LCOE by only 3%.