Wood Mackenzie’s latest global levelized cost of electricity (LCOE) report shows that four‑hour battery storage is now cheaper to install than open‑cycle gas turbines in every market where both were modeled, covering 43 regions across Europe, North America, Latin America, Asia Pacific and the Middle East and Africa. The analysis attributes this crossover to declining battery‑manufacturing costs and rising gas‑turbine expenses driven by fuel volatility and supply constraints.
Shows how repurposing EV batteries reduces manufacturing costs, supporting the article’s point about declining battery‑manufacturing costs making four‑hour storage cheaper than gas turbines.
In the Middle East and Africa, where utility‑scale solar averages $37/MWh today, four‑hour storage is projected to drop 33% to $80/MWh by 2035, making it cheaper than gas peaking throughout the region. China’s grid‑storage benchmark is more than 55% below the Asia Pacific average of $134/MWh, a gap expected to narrow to $92/MWh by 2036 as domestic supply‑chain integration pulls regional costs down. Latin America is forecast to see solar PV with single‑axis tracking fall 38% in cost by 2060 and onshore wind LCOE decline about 21% by 2030, while Europe’s onshore wind capex is falling 2.5% annually, pushing LCOE toward $60/MWh by 2060 after capacity factors become the main driver.
Wood Mackenzie principal analyst Ahmed Jameel Abdullah said the shift is ‘decisive and widening,’ noting that gas‑turbine shortages and rising fuel volatility are lifting peaking costs while expanding battery manufacturing pushes storage prices down. He added that storage and solar together are redefining the economics of power systems, closing off the economic case for new gas‑peaking capacity from Latin America to Asia Pacific and allowing long‑term contracted renewables to set the ceiling rather than the floor on power costs.
Illustrates the combination of solar generation and battery storage discussed as redefining power system economics and reducing reliance on gas‑peaking plants.