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Four-hour batteries now cost less to run than open-cycle gas turbines everywhere analysts looked. That is the headline finding behind batteries cheaper gas turbines comparisons published this week by energy consultancy Wood Mackenzie. The firm modeled 43 markets across every continent. Batteries won the cost race in all of them.
How the batteries cheaper gas turbines comparison was done
Wood Mackenzie modeled the cost of building and running four-hour-duration battery storage. It compared that cost against open-cycle gas turbines, the type utilities often use for short bursts of peak power. Across all 43 markets, batteries came out ahead. The firm expects battery electricity costs to keep falling over the coming decades. It expects gas turbine costs to keep rising over that same stretch, according to TechCrunch’s report on the findings.
Ahmed Jameel Abdullah, a principal analyst at Wood Mackenzie, called the shift “decisive and widening.” In the Middle East and Africa specifically, the firm projects four-hour batteries will be 33% cheaper than gas turbines by 2035. That would mean batteries displacing gas peaking plants on cost. The firm expects that shift across every gas market it tracks in the region.
Data centers are driving gas turbine prices up
Rising electricity demand from AI data centers is pushing energy prices higher across the US and other markets. Developers building new data centers have been buying up gas turbines in bulk. That buying has driven prices higher for everyone else who needs one too. The effect hits open-cycle turbines hardest. Utilities rely on them as flexible peaking plants, even though they cost more to run than efficient combined-cycle units.
Procurement delays compound the price problem. Open-cycle turbines now take two to four years to deliver. Waitlists for closed-cycle turbines stretch into the early 2030s. Both backlogs are adding to the cost of building any new gas-fired power plant. That holds whether or not the plant ends up serving a data center.
That backdrop connects directly to strains elsewhere in the AI buildout. Finland recently halted a Google data center project over power concerns. We covered that halt in our report on the Finland construction halt. Data center economics have also been under scrutiny after a separate revenue report rattled investors. We detailed that report in our coverage of OpenAI’s revenue numbers. Together, these stories paint a picture of an industry straining its own power supply faster than new plants can be built.
Solar still wins on raw cost, but faces its own hurdles
Wood Mackenzie’s analysis found solar power is the cheapest new electricity source in every market it surveyed, batteries included. In North America, though, tariffs and import restrictions are squeezing new solar projects. Utility-scale solar is expected to fare somewhat better than smaller rooftop projects. That is partly because 168 gigawatts of planned capacity is shielded by safe-harbor provisions tied to recent tax legislation.
China’s energy storage costs are running about 55% below those of its regional neighbors, the firm found. That gap gives Chinese battery manufacturers a pricing edge as global demand for grid storage keeps climbing. It also means the race to build the cheapest grid battery is, for now, not an especially close one.
Why this matters beyond the spreadsheets
A utility deciding how to meet a spike in demand now has a straightforward financial case for batteries over a new gas peaker, in market after market. That case gets stronger every year gas turbine backlogs stretch further into the future. It does not mean gas turbines disappear overnight. Existing plants keep running for decades. Some grids still need the specific kind of power only a turbine can supply on short notice, especially during long stretches of cloudy or windless weather that batteries alone cannot ride out.
For data center operators specifically, the math has gotten harder to ignore. A battery system ordered today can often be installed well before a turbine ordered on the same day even arrives. That timing gap alone is pushing some developers toward storage, independent of which technology is cheaper on paper.
What comes next for battery and turbine prices
Watch for utilities and data center developers to lean harder into battery storage contracts over the next few years. That shift should be sharpest where turbine waitlists already stretch past 2030. Wood Mackenzie expects the price gap between batteries and gas turbines to keep widening, not narrowing, through the next decade. The US gas turbine market specifically is expected to see tighter supply narrow over the coming ten years. That tightening should keep upward pressure on prices in that market too.
Common questions about batteries cheaper gas turbines
Are batteries actually cheaper than gas turbines everywhere?
Wood Mackenzie found four-hour battery storage cost less than open-cycle gas turbines in all 43 markets it modeled, across every continent surveyed.
Why are gas turbine prices rising?
AI data center developers have been buying gas turbines in large volumes, pushing up prices and extending delivery waitlists for everyone else who needs one.
How long do gas turbines take to deliver now?
Open-cycle turbines take two to four years. Closed-cycle turbine waitlists stretch into the early 2030s, according to Wood Mackenzie’s analysis.
Is solar even cheaper than batteries?
Yes, for new generation. Wood Mackenzie found solar is the cheapest new power source in every market surveyed, though batteries are needed to store that power for later use.
Does this mean gas turbines will stop being used?
No. Existing gas plants will keep running for years, and some grids still rely on turbines for power needs batteries cannot yet fully cover.
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