Four-Hour Battery Storage Outpaced Gas Peakers Globally
Long-duration storage has become more cost-effective than gas turbines in 43 markets as data center demand surges.
Updated on Oct. 9, 2026 in Data Centers
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Four-hour duration batteries are now less expensive than open-cycle gas turbines in 43 surveyed markets. This finding highlights a shift in energy economics as data center developers increasingly compete for limited conventional power infrastructure.
Why it matters
The rapid adoption of gas turbines for AI-driven data centers threatens to lock in inefficient, high-cost power for years. This reliance persists even as battery storage matures into a cheaper, more accessible alternative for peaking power needs.
Four-hour battery systems are now cheaper than open-cycle gas turbines across 43 markets. While China maintains storage costs 55 percent lower than its neighbors, global developers still face 2 to 4 year waits for open-cycle gas turbine delivery.
The players
Wood Mackenzie
A research and consultancy firm specializing in energy, renewables, and natural resources data.
The details
Utilities utilize peaking power plants—facilities designed to operate only when electricity demand exceeds base-load capacity—to maintain grid stability. While developers currently favor gas turbines, procurement waitlists for more efficient closed-cycle variants now extend into the early 2030s. Batteries bypass these mechanical constraints by storing electricity chemically, though current deployment is heavily influenced by regional capital expenditure differences like those seen in China.
Timeline
October 9, 2026: Analysis regarding global energy costs was published.
End of 2027: Deadline for solar projects to secure tax credits via safe-harbor provisions.
Early 2030s: Projected procurement waitlist duration for closed-cycle gas turbines.
2035: Year by which batteries are projected to be 33 percent cheaper than gas peaking in the Middle East and Africa.
The Tech Race
Solar remains the cheapest new power source in every surveyed market, bolstered by the 168 gigawatts of capacity currently tied to the One Big Beautiful Bill tax credits. This cost advantage now extends to battery storage, signaling a departure from the traditional reliance on gas-fired peaking plants.
Energy costs for data center operations will likely see divergence as developers shift toward battery-heavy configurations to avoid the multi-year wait times for gas turbines. Operators should monitor solar tax credit status, as the 2027 expiration of safe-harbor provisions could tighten power supply constraints.
The takeaway
Battery storage is no longer a theoretical competitor but an economic incumbent for peaking power in dozens of markets. Readers should monitor regional capital expenditure trends for battery storage and the 2027 tax credit deadline for solar as primary indicators of near-term power availability.
Further reading
For more on how power requirements are shifting facility development, see our Data Centers coverage.
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