Four-hour battery storage has become less expensive than open-cycle gas turbines in each of the 43 markets covered by a new report from Wood Mackenzie, and across all continents. The report indicates that the cost of electricity from batteries is likely to fall further, while electricity generated by these turbines is expected to become more expensive over the coming decades.
The finding comes at a time when the expansion of data centers, partly driven by artificial intelligence, is pushing electricity demand to record levels. Data center developers are purchasing available turbine models to secure supply, which has driven up prices, particularly for open-cycle turbines, which are relatively easy to provide but are less efficient and more expensive to operate.
Demand Pressure on Power Generation Infrastructure
Utilities often use open-cycle turbines as peaker plants, operating them when consumption rises. But their rising prices do not affect data center developers alone; they can also increase the costs of utilities that rely on them to meet temporary loads.
Despite the relative simplicity of manufacturing open-cycle turbines compared with closed-cycle turbines, obtaining them currently takes between two and four years. Waiting lists for closed-cycle turbines extend into the early 2030s, driving up the prices of new gas plants of all types.
What Is Changing in Practice?
Wood Mackenzie’s figures show that storage is no longer merely an environmental or technical option, but has become a direct economic competitor to gas-fired power generation in peak-demand applications. This could matter to data center operators, utilities, and developers seeking deployable electric capacity without waiting years for new turbines.
The shift does not involve batteries alone. Solar power is the cheapest new source of electricity generation in all the markets studied in the report. In North America, solar prices remain under pressure from tariffs and import restrictions, although utility-scale solar projects may be better able to withstand these near-term shocks. The report says that 168 gigawatts of capacity is largely protected from these effects under the safe-harbor provisions of the One Big Beautiful Bill, which preserved tax credits for projects that began construction or were completed before the end of 2027.
Regional Variation and a Potential Decline in Gas
The report expects the U.S. natural gas market to contract over the next decade. In the Middle East and Africa, four-hour batteries will be 33% cheaper than the alternatives by 2035, allowing them to displace gas generation on a cost basis during peak periods in all of the region’s gas markets. The report also estimates that energy storage costs in China are 55% lower than those in neighboring countries.
Ahmed Jameel Abdullah, a lead analyst at Wood Mackenzie, said that this economic shift is “decisive and expanding.” However, the source does not specify the details of the financial models or price assumptions underlying the comparison, nor does it by itself settle questions of reliability, required storage duration, or the costs of connecting projects to the grid; these factors will remain influential in the decisions of data centers and utilities.