Battery Storage Now Cheaper Than Gas Peakers: WoodMac — SkimNews
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- Wood Mackenzie found 4-hour battery storage beats new gas peakers on cost across global markets, with US 2026 commercial operation running 65-75% cheaper than new open-cycle gas turbine peakers depending on state-level carbon pricing.
- Gas turbine manufacturers GE Vernova, Siemens Energy, and Mitsubishi each face backlogs of 35-116 GW, with turbine prices projected to hit $600/kW by end of 2027—a 195% increase since 2019.
- North American gas generation is entering a "supply deficit cycle through the late 2030s" driven by data center load growth, a dynamic that keeps thermal capital costs elevated and reinforces the 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.
- Single-axis tracker solar is now the lowest-cost new-build technology in 43 of 48 modeled markets, with Saudi Arabia and UAE solar LCOE on track to fall below $20/MWh by 2033.
- 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.
- US distributed solar faces the steepest price pressure, with residential and commercial module prices forecast to rise 6% in 2027 and a further 14% in 2028, while utility-scale has 168 GW of safe-harbored capacity offering partial protection.
Why it matters: Data center demand and a 195% surge in gas turbine prices since 2019 have flipped peaking-power economics: developers and utilities now save 65-75% per project by choosing batteries over new gas turbines in the US, and the cost gap widens every year as turbine supply stays constrained through the late 2030s.
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