# Renewables and Advanced Storage in Power Systems: The Iberian Case
## 6 Conclusions  
This paper has presented a simulation study that yields the optimal generation mix in the Iberian Peninsula (Spain and Portugal) to comply with the renewables targets of their National Energy and Climate Plans, under certain assumptions. The study is the result of a high-dimensional optimization problem. Sensibility studies have been run to assess how storage cost uncertainties and CO2 prices affect the generation mix. This uncertainty analysis has been run using a mathematical method aimed at reducing the computational burden. The main findings of this study are summarized below. Storage is a need for a generation mix with a high share of renewables, and the optimal storage capacity is a small part of the consumed energy. Storage capacity is used mostly to compensate for the daily cycle of PVs. This is shown by the optimal capacity of the storage, which is slightly above 6 h for the average forecasted cost for storage. This optimal storage capacity is close to the technical possibilities of Li-ion batteries, and further technological advances would be needed to increase the capacity of these batteries to meet the requirements of a renewable-based power system. The optimal renewable mix depends on storage costs--more expensive storage leads to more wind power, whereas less expensive storage means more PVs in the mix. The considered uncertainty of the future costs of storage, with a standard deviation of 60% of the average estimated cost, leads to an uncertainty with a standard deviation of 28.65% of the installed power for the wind, and 18.76% of the PV. Renewable generation competes with storage. To achieve the renewable target, more renewable power with a lower capacity factor must be installed if storage is expensive, and the opposite must happen if storage is inexpensive. Thus, the spillage of intermittent \begin{table}
\begin{tabular}{c c c c c} \hline \hline  & **Base** & **50 \(\upmu\)/MWh** & **100 \(\upmu\)/MWh** & **185 \(\upmu\)/MWh** \\ \hline Energy cost & & & & \\ (\(\upmu\)/MWh) & 72.41 & 76.40 & 80.11 & 86.41 \\ \hline Average & & & & \\ marginal price & 35.53 & 38.67 & 47.51 & 60.32 \\ (\(\upmu\)/MWh) & & & & \\ \hline Storage cost & 1600.00 & 1598.70 & 1598.10 & 1597.8 \\ (M€) & 751.84 & 822.05 & 1082.80 & 1629.7 \\ \hline \hline \end{tabular}
\end{table} 
Table 8: Cost of energy and storage for different CO\({}_{2}\) prices. renewables with more installed storage capacity is around 4% of the production, whereas with less storage is almost 15% of the production. Storage costs have a small effect on the amount of installed power and the capacity factor of base thermal generation, but they have a noteworthy effect on the installed power of peakers, wind, and PVs. For the assumption of low storage cost, the reduction in installed power of open-cycle plants is 19% over the base case, and for the high-cost assumption, there is an increase of 33%. The impact on the capacity factors of renewable technologies is lower in relative terms, although it leads to a relatively high spillage of renewable production, as already mentioned. With high carbon prices, close to the upper limits of the Social Cost of Carbon for 2017 (185 \(\upxi\)/tCO\({}_{2}\) in this study), arbitrage revenues might recover the investment costs of battery storage. This conclusion holds, provided that thermal plants are present in the generation mix and set the marginal price. With lower carbon prices, a capacity mechanism is needed for the cost recovery of storage investments, although the participation of storage in reserve and flexibility markets may alleviate this need. This work was supported by the Spanish Ministerio de Ciencia, Innovacion y Universidades under Project PID2019-104449 RB-I00, Optimal and secure operation of the power system with a high share of renewable energy (SECOP). Not applicable. **Data Availability Statement:** Publicly available datasets were used in this study. This data can be found in the references given in the body of the paper. The author declares no conflict of interest.