Europe’s transition to carbon neutrality requires coordinated policy alignment alongside significant changes in energy system planning and operation. The large-scale deployment of variable renewable energy sources (vRES), particularly wind and solar PV, is central to decarbonising the power sector; however, their inherent variability increases the need for system flexibility to maintain supply–demand balance.

In this context, the Man0EUvRE project under the EU Clean Energy Transition Partnership (CETP) developed different scenarios to explore alternative energy transition pathways. This work focuses on two contrasting scenarios, EU Trinity and NECP Essentials (NECP-E), modelled using the open-source GENeSYS-MOD energy system model, which optimises capacity expansion, generation portfolios, and flexibility requirements.

Building on the capacities obtained from GENeSYS-MOD for Portugal and Spain, this work analyses the operation and market participation of battery energy storage systems (BESS) in the Iberian day-ahead market (DAM). The DAM is simulated with the open-access PyMIBEL-DAM tool, based on the Python for Power System Analysis (PyPSA) framework. Two BESS operational approaches are compared: a system-optimal dispatch and a market-driven approach in which BESS participate as independent price-taking agents, optimising their charging and discharging schedules according to DAM price signals. The analysis considers 2030, 2040, and 2050.

Results show that the energy transition pathway and BESS operational strategy strongly influence future MIBEL outcomes. Average DAM prices decline towards 2050 as renewable penetration increases but remain higher under EU Trinity than under NECP-E, reflecting lower solar PV deployment and greater reliance on thermal generation. Solar PV captured prices also decline towards 2050 due to the price-cannibalisation effect, while onshore wind maintains higher and more stable captured prices. System-optimal BESS operation results in fewer demand non-covered hours, whereas market-driven operation generally increases wind and solar PV captured prices but may compromise system adequacy, particularly under EU Trinity. BESS arbitrage remuneration is strongly influenced by temporal price spreads and operational constraints, highlighting the role of operational strategy in determining storage value.

The findings emphasise the need to carefully plan the energy transition and design future electricity markets considering BESS operational behaviour, to promote the efficient integration of renewable generation while ensuring reliable system operation.