Batteries Now Beat Gas Turbines on Cost in All 43 Markets

Four-hour battery storage is now cheaper than open-cycle gas turbines in every one of the 43 markets Wood Mackenzie surveyed, on every continent, according to a new report from the consultancy. The finding upends the default playbook of data center developers, who have spent the AI boom stockpiling gas turbines wherever they can find them.

Wood Mackenzie predicts the gap will keep widening: electricity from batteries will continue to get cheaper in the coming decades, while power from gas turbines will only grow more expensive. "This economic shift is decisive and widening," Ahmed Jameel Abdullah, principal analyst at Wood Mackenzie, said in a press release.

Why did gas turbines get so expensive?

The report lands as energy prices in the U.S. and elsewhere keep rising, fueling inflation while data centers push electricity demand to new heights. AI data center developers have been buying any turbine model they can get their hands on, driving prices up.

The squeeze has hit open-cycle gas turbines hardest. They are more readily available than closed-cycle units but less efficient and more expensive to operate. Utilities often deploy them as peaking plants that generate only during periods of high demand — so rising turbine prices raise costs for utilities, too.

The supply picture is tight across the board. Open-cycle turbines, though simpler to manufacture, now take two to four years to procure. Waitlists for closed-cycle turbines stretch into the early 2030s. Both backlogs have been spiking prices for all new natural gas power plants.

Where do batteries and solar gain ground?

The economics are shifting fastest outside North America. In the Middle East and Africa, four-hour batteries will be 33% cheaper by 2035, what Wood Mackenzie describes as "displacing gas peaking on cost across every gas market in the region." In China, energy storage costs run 55% below those of its neighbors.

The report projects the market for U.S. natural gas will narrow in the coming decade.

What about solar in North America?

Solar remains the cheapest form of new power in every market in the survey, including North America — though the situation there is complicated. Solar prices are "under pressure" from tariffs and import restrictions, according to Wood Mackenzie.

Utility-scale solar is expected to fare better. The report notes that 168 gigawatts of utility-scale solar is largely protected from near-term price shocks thanks to safe-harbor provisions in the One Big Beautiful Bill, which preserved tax credits for projects that began construction or are completed before the end of 2027.

For data center operators and utilities planning capacity today, the message is stark: the cheapest peaking resource on the market is no longer a gas turbine anywhere Wood Mackenzie looked — and the price trends point in only one direction.