Impact of Co-locating Solar PV and Pumped Hydro Storage on Transmission Grid Congestion and Renewable Curtailment: A Case Study of the Iberian Peninsula

Abstract

The European energy system is undergoing a major transition towards renewable sources to meet the Net Zero Emissions (NZE) target by 2050. With the accelerated adoption of variable renewable energy sources (VRES), systemic weaknesses due to intermittency, curtailment, and congestion are becoming more common. Mitigation strategies, including battery energy storage systems (BESS) and pumped hydro storage (PHS), are used to enhance grid flexibility. Co-locating renewable generation and storage has proven to be an effective solution to mitigate these challenges and reduce the demand for grid expansion. While BESS has been studied and deployed in co-located configurations, the potential of large-scale co-location of VRES with PHS remains underexplored—especially its system-wide effects. This research evaluates the system-level impacts of co-locating solar photovoltaic (PV) and PHS in the context of Iberia. Using a cost-based optimisation with the open-source PyPSA-EUR model, three scenarios were analysed: (1) a baseline reflecting 2024 system conditions, (2) an unconstrained PV expansion based on upcoming PV projects, (3) a co-location scenario where part of the PV capacity from scenario 2 was reallocated to buses with PHS. The evaluation is based on renewable curtailment, line loading, locational marginal prices, and total system cost. The results show that unconstrained PV expansion substantially increases curtailment and demands higher transmission line capacity. Scenario 2 alleviates line loading in some regions but increases it in some other regions, and it requires less grid capacity expansion, lowering total system cost by 0.63%. However, system-wide PV curtailment marginally increases due to bottlenecks found at specific PHS sites with limited pumping capacity. Overall, the benefits are marginal but provide a better utilisation of existing infrastructure. These findings indicate that co-locating PV and PHS should be considered as a complementary measure alongside grid expansion and other flexibility options such as BESS, interconnections and sector coupling to ease pressure on the necessary expansion of the power grids.