Energy storage has reached a new economic milestone: four-hour battery systems are now cheaper than open-cycle natural gas turbines in all 43 markets reviewed by Wood Mackenzie.
Open-cycle gas turbines are commonly used to supply electricity during demand peaks, including periods when data centers require additional power. However, rising equipment costs, longer procurement timelines and higher operating expenses are reshaping the economics of flexible electricity generation.
A changing equation for data center energy
The report indicates that batteries can deliver stored electricity at a lower cost than gas peaking plants across every continent. This advantage is expected to expand as battery technology, manufacturing scale and deployment experience continue to improve.
Demand from AI-focused data centers has intensified competition for gas turbine equipment. Even relatively simple open-cycle models can now require between two and four years to secure, while more complex combined-cycle systems face much longer delivery queues.
By contrast, battery storage can help grids respond quickly to demand fluctuations, support renewable energy output and reduce reliance on fuel-based generation during peak periods. Solar power also remains the lowest-cost option for newly built electricity generation in every market assessed by Wood Mackenzie.
Storage momentum accelerates worldwide
Wood Mackenzie expects the cost gap to widen over the next decade. In the Middle East and Africa, four-hour batteries are projected to become 33% cheaper than gas peaking generation by 2035. China's energy storage costs are already estimated to be 55% below those of neighboring markets.
The shift highlights how storage is evolving from a supporting technology into a central part of modern power systems. As digital infrastructure expands, lower-cost batteries could give utilities and data center operators a more flexible path toward reliable, cleaner electricity.
Affordable energy storage may accelerate the transition to power networks where renewables, intelligent demand management and rapid-response batteries work together at scale.
