As the European Union moves toward carbon neutrality by 2050, the electricity sector must transition to weather-dependent variable renewable energy (VRE) while ensuring a 100% reliable supply. This work represents the first application of the “firm power” paradigm to the Iberian Peninsula. This strategy relies on the deliberate overbuilding of VRE capacity and proactive curtailment of surplus generation to provide a guaranteed power supply at the lowest system cost, reducing the need for expensive long-duration storage.

Methods

The study employs the open-source power system optimization model PyPSA-Eur to identify cost-optimal capacity and dispatch configurations for a fully decarbonized 2050 Iberian system. Custom constraints were implemented to analyze how system dynamics, costs, and technology mixes evolve as VRE capacity is progressively overbuilt. The analysis evaluates four primary technology scenarios – including variations with and without hydropower and natural gas, to assess the role of these technologies – and tests the sensitivity of the system to interannual hydrological variability using weather data from dry, wet, and average precipitation years.

Main Results

Results demonstrate that low-cost firm power is achievable in Iberia, primarily through a combination of solar-dominated VRE overbuilding and battery storage. In the cost-optimal configuration, the Levelized Cost of Electricity (LCOE) is €58/MWh when a 5% contribution from natural gas is permitted. If gas is entirely removed, the LCOE rises by only 7% to €62/MWh. Solar PV consistently emerges as the dominant technology, comprising 74 to 90% of the VRE mix. The existing hydropower fleet acts as an important structural advantage, providing significant flexibility which keeps costs low. While dry years require approximately 25% more battery storage than wet years, the impact on the overall LCOE is marginal at only 3%.

Conclusions

The study concludes that achieving a firm, 100% renewable power system in Iberia through overbuilding of VRE capacity is technically feasible and economically competitive. Hydrogen was found not to be cost-competitive due to existing hydro resources. Furthermore, the results indicate that market design and institutional constraints, rather than technological limitations, are the primary barriers to deploying these optimal firm power configurations.

Acknowledgments

This work was conducted as part of a PhD project, and funded by the Portuguese Fundação para a Ciência e a Tecnologia (FCT) I.P./MCTES through the FCT Studentship UI/BD/154674/2023 and through national funds (PIDDAC): LA/P/0068/2020 (https://doi.org/10.54499/LA/P/0068/2020), UID/50019/2025 (https://doi.org/10.54499/UID/50019/2025), UID/PRR/50019/2025 (https://doi.org/10.54499/UID/PRR/50019/2025), UID/PRR2/50019/2025 (https://doi.org/10.54499/UID/PRR2/50019/2025), and by the Portuguese Recovery and Resilience Plan (RRP), through project number 56, ATE (Aliança para a Transição Energética).