Four-hour battery storage is now cheaper than open-cycle gas turbines, according to more than 40 markets where energy data analytics firm, Wood Mackenzie, modelled both technologies for its latest report on levelised cost of electricity.

The report, released on October 8, said in the Middle East and Africa, where utility-scale solar already leads at $37/MWh, four-hour storage is forecast to fall a further 33% to $80/MWh by 2035, displacing gas peaking on cost across every gas market in the region. 

Meanwhile, China remains the global storage cost benchmark at more than 55% below the rest of Asia Pacific average, illustrating how manufacturing scale is redrawing the global cost map.

“This economic shift is decisive and widening,” said Ahmed Jameel Abdullah, principal analyst at Wood Mackenzie. “Gas turbine shortages and rising fuel volatility are driving up peaking costs, while expanding battery manufacturing continues to push storage costs down.”

Abdullah notes a similar transformation has already reshaped baseload economics. He said single-axis tracker solar is now the lowest-cost new-build technology in 43 of 48 modelled markets, with onshore wind leading in five.

In the most competitive markets, Saudi Arabia and the United Arab Emirates, solar LCOE is on track to fall below $20/MWh by 2033.

The structural shift we are tracking is no longer just about renewables becoming competitive, Abdullah said. “It is about storage and solar together redefining what the economics of a power system look like.

“From Latin America to Asia Pacific, the combination of falling storage costs and world-class renewable resources is closing off the economic case for new gas peaking capacity, while long-term contracted renewables increasingly set the ceiling rather than the floor on power costs.”

The report, which covers the regions of Europe, North America, Latin America, Asia Pacific and the Middle East and Africa, is available in full online.