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Four-hour battery storage now 65-75% cheaper than new US gas peakers, WoodMac finds

Four-hour battery storage beats gas peakers on levelized cost across global markets, Wood Mackenzie says. US systems entering service in 2026 run 65-75% cheaper than new open-cycle gas turbines as turbine backlogs and data-center demand lift peaking costs.

By Greener Numbers Editorial Team · Published October 18, 2026 · Updated 10/18/2026

Four-hour battery energy storage is now cheaper than gas peaker plants on a levelized cost basis in markets across the globe, according to a Wood Mackenzie analysis reported by Utility Dive on October 8, 2026.

In the United States, four-hour battery systems with a 2026 commercial operation date can be 65% to 75% cheaper than new open-cycle gas turbine peakers, the firm said. In North America, investment in 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 strengthens the long-term case for renewables and storage.

Gas turbine prices are projected to reach $600 per kW by the end of 2027, a 195% increase since 2019. The three major turbine manufacturers - GE Vernova, Siemens Energy and Mitsubishi - each carry order backlogs ranging from 35 GW to 116 GW as they plan capacity expansions.

In the Middle East and Africa, four-hour storage costs are forecast to fall 33% to $80 per MWh by 2035, displacing gas peaking on cost across every gas market in the region, the report says. China remains the global storage cost benchmark at more than 55% below the rest of the Asia-Pacific average.

The figures are Wood Mackenzie's analysis and forecasts, not market transaction data; realized project costs vary with siting, interconnection and state carbon policies.

Official source: Utility Dive ↗