4-hour storage cheaper than gas peakers across global markets: WoodMac — SkimNews
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- Wood Mackenzie found 4-hour battery storage is now cheaper than gas peakers in markets across the globe, with US projects for a 2026 commercial operation date running 65% to 75% cheaper than new open-cycle gas turbine peakers depending on state-level carbon pricing.
- Gas turbine prices are projected to hit $600/kW by the end of 2027 — a 195% increase since 2019 — with GE Vernova, Siemens Energy and Mitsubishi each carrying backlogs of 35 GW to 116 GW as they plan capacity expansions.
- North America is entering a "supply deficit cycle" for gas generation capacity through the late 2030s driven by data center load growth, a dynamic WoodMac says keeps thermal capital costs elevated and "reinforces the long-term economic case for renewables and storage."
- Middle East and Africa 4-hour storage costs are forecast to fall 33% to $80/MWh by 2035, displacing gas peaking on cost across every gas market in the region.
- China remains the global storage cost benchmark at more than 55% below the rest of the Asia Pacific average, "illustrating how manufacturing scale is redrawing the global cost map," the firm said.
- Solar LCOE is also at historic lows — single-axis tracker solar is the lowest-cost new-build technology in 43 of 48 modeled markets, with Saudi Arabia and the UAE on track to fall below $20/MWh by 2033.
- Storage tax credits phase out by 2038, triggering a cost spike; over the long term, new battery chemistries, hardware commoditization and domestic supply chain expansion are expected to drive storage LCOE down 10% by 2060.
Why it matters: For utilities planning US commercial operation in 2026, 4-hour batteries now undercut new gas peakers by 65% to 75% — a cost flip made permanent by 195% gas turbine price inflation since 2019 and OEM backlogs of 35 GW to 116 GW. Data center demand is tightening gas supply further, accelerating displacement of peaking gas by storage across every major market WoodMac modeled.
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