A method for controlling an inverter-based resource (IBR) having a power converter connected to an electrical grid includes receiving a first power limit signal for the IBR from an external controller, receiving a second power limit signal for the IBR, and determining a constrained power limit signal based on the first and second power limit signals. The method also includes applying a first frequency droop function to the constrained power limit signal and determining at least one of a power reference signal or a pitch reference signal for the IBR as a function of an output of the first frequency droop function and the constrained power limit signal. Further, the method includes determining one or more control commands for the IBR based on at least one of the power reference signal or the pitch reference signal and controlling the IBR based on the control command(s) so as to support a grid frequency of the electrical grid within power available at the IBR.