4-hour battery storage is cheaper to install than gas turbines all across globe

A new Wood Mackenzie report finds four-hour battery storage costs have fallen below open-cycle gas turbines in every market analyzed, driven by declining battery prices and rising gas fuel volatility. The shift is most pronounced in the Middle East and Africa, where storage is forecast to drop 33% to $80/MWh by 2035, undercutting gas peaking in all regional markets. Utility-scale solar remains the lowest-cost new-build technology in 43 of 48 modeled markets, with onshore wind leading in five, reflecting sustained cost declines across renewable technologies.

In Latin America, solar PV with single-axis tracking is projected to remain the cheapest generation option through 2026, with costs falling 38% by 2060. Brazil, Chile and Mexico benefit from high-capacity factors and world-class solar resources, while onshore wind costs are expected to decline nearly 21% by 2030 to $58/MWh due to Chinese turbine expansion and larger turbine deployments.

China leads global grid-scale storage costs at more than 55% below the Asia Pacific average of $134/MWh, with competitive supply expected to pull the regional average to $92/MWh by 2036. Disparities persist, however, as markets like Japan, Australia and the Philippines face higher costs from import duties and domestic policies, despite overall cost reductions across the region.

Europe faces the highest fossil-fuel generation costs globally, with levelized carbon costs projected to exceed fuel costs by 2030. Meanwhile, offshore wind costs are expected to decline from the 2030s as supply chains stabilize, while utility-scale solar remains the most cost-competitive source despite near-term tariff pressures and import restrictions.