Wood Mackenzie’s latest levelized cost of electricity analysis finds four-hour battery storage cheaper than open-cycle gas turbines in all 43 markets where both were modeled. Turbine procurement runs two to four years, which gives storage a speed advantage alongside the cost advantage for any site waiting on capacity.
Key Takeaways
Wood Mackenzie finds four-hour battery storage cheaper than open-cycle gas turbines in all 43 markets where both technologies were modeled.
Open-cycle turbines take two to four years to procure, and closed-cycle waitlists extend into the early 2030s, according to TechCrunch reporting on the analysis.
PJM Interconnection fast-tracked two battery projects totaling 1,660 MW and one 455 MW gas uprate in its first Expedited Interconnection Track round, all due in mid-2029.
North American solar faces tariff pressure: Section 232 duties of 15% on polysilicon through modules take effect December 4, 2026, per the Solar Energy Industries Association (SEIA).
Wood Mackenzie Prices Storage Below Gas Peaking Worldwide
Wood Mackenzie published its global levelized cost of electricity (LCOE) analysis on October 8, 2026. Four-hour battery storage came in cheaper than open-cycle gas turbines in all 43 markets where both were modeled, according to the Wood Mackenzie release. Single-axis tracker solar is the lowest-cost new-build technology in 43 of 48 modeled markets, and onshore wind leads in the other five.
Ahmed Jameel Abdullah, principal analyst at Wood Mackenzie, said: “This economic shift is decisive and widening.” He added that gas turbine shortages and rising fuel volatility are driving up peaking costs.
The regional results show how widely the pricing varies. In the Middle East and Africa, four-hour storage costs $120 per megawatt-hour in 2026 and falls 33% to $80 by 2035. Across Asia Pacific, China’s storage benchmark sits more than 55% below the regional average of $134 per megawatt-hour. In Europe, turnkey battery capital costs rose about 2%, the first increase in three years, as cell prices rebounded roughly 10% from their 2025 low.
Turbine Scarcity Widens the Cost Gap
TechCrunch reported the findings on October 9 and tied them to data center demand. AI data center developers have driven up turbine prices by buying nearly any available model. Open-cycle turbines take two to four years to procure, and waitlists for closed-cycle units extend into the early 2030s.
Utilities use open-cycle turbines as peaking plants, so higher turbine prices raise the cost of covering the hours of highest demand. Wood Mackenzie also finds solar the lowest-cost new-build option in nearly every modeled market, which positions storage as the partner that moves midday solar into the evening peak.
Turbine Backlogs Run Through 2030 Across Major Manufacturers
POWER Magazine’s September survey of turbine manufacturers shows why the lead times run long. GE Vernova reports 116 GW under contract, up from 100 GW three months earlier, with 53 GW in firm backlog and 63 GW under slot reservation agreements. The company expects at least 125 GW by year end and describes its heavy-duty production as mostly sold out through 2030, with more than half of 2031 production expected to be contracted by year end.
Aeroderivative units can be commissioned in about six months, while heavy-duty units may need about 18 months of site work after shipment. Heavy-duty machines shipping in 2030 and 2031 are expected to enter service in 2032 and 2033. Siemens Energy reports a 95 GW backlog, and Mitsubishi Heavy Industries reports 80 large-frame units totaling 35 GW. Hiroshi Nishio of Mitsubishi said: “Order pricing has not declined, and the profitability of newly booked projects continues to improve gradually.”
Developers combine the technologies. Pacifico Energy’s GW Ranch in Pecos County, Texas, is permitted for up to 7.65 GW and includes 1.8 GW of batteries and up to 750 MWac of solar, with first power expected in the first quarter of 2027. The mix shows a large load buyer pairing gas with storage to shorten the path to first power.
North American Solar and Storage Face Tariff and Equipment Pressure
The Wood Mackenzie analysis flags component price risk in North America. Utility-scale solar holds 168 GW of safe-harbored capacity, and module prices are expected to rise about 5% a year through 2030. Residential and commercial module prices are forecast to rise 6% in 2027 and 14% in 2028. North American storage LCOE falls 10% by 2060, with a cost spike expected after the investment tax credit phases out from 2038.
SEIA and Wood Mackenzie’s Q3 2026 Solar Market Insight adds the trade picture. A Section 232 action imposes a 15% tariff plus minimum import prices on polysilicon through modules, effective December 4, 2026. The Federal Communications Commission added foreign-produced inverters to its Covered List on July 28, and an August 26 executive order restricts imports of power generation equipment from covered foreign entities. Solar and storage together made up 70% of new U.S. electricity-generating capacity added in the first half of 2026.
PJM Interconnection Puts the Speed Premium in Practice
The PJM selections apply the cost finding to a live interconnection queue. PJM Interconnection (PJM) accepted the first three projects under its Expedited Interconnection Track on October 8: an 860 MW battery project in Crawford, Pennsylvania, an 800 MW battery project in Morrow, Ohio, both from ENGIE IR Holdings, and a 455 MW gas uprate at the Hunterstown plant in Adams, Pennsylvania, as Utility Dive reported. The three total about 2.1 GW and target mid-2029 service.
Batteries make up roughly 1,660 MW of that 2.1 GW. PJM calls the track one part of a broader response that includes a pending reliability backstop procurement, updates to surplus interconnection service rules and a reformed generator interconnection process. The American Public Power Association notes that the track also lets individual states accelerate selected projects based on their resource adequacy needs.
Safety Data Strengthens the Storage Case
Insurers and lenders weigh storage safety alongside cost. An Electric Power Research Institute (EPRI) analysis released October 5 found that the global failure rate for lithium-ion storage systems per GWh fell about 98% from 2018 to 2025 and 50% between 2024 and 2025, as Utility Dive reported. Annual failure rates for stationary systems range from 0.04% to 0.14%, which EPRI compares with 0.1% for oil-filled transformers.
About 93% of the safety incidents EPRI reviewed caused no injuries or fatalities, and no U.S. injuries or fatalities from storage failures have been reported since April 2019. Facilities commissioned before 2021 make up about 3% of global capacity, and indoor facilities fail more often and sustain more damage than outdoor ones. Lakshmi Srinivasan, EPRI principal investigator, said: “There are things we know in 2026 that were not necessarily understood in 2019 or 2020.”
The findings shape procurement. Owners underwriting onsite storage should specify outdoor siting or propagation barriers between units, current NFPA 855 compliance and gas detection inside enclosures, and should schedule risk assessments for any pre-2021 systems in a portfolio. Energy Storage News reports that EPRI could not isolate cell chemistry as a risk factor.
Efficiency Cuts the Base Load Beneath the Peak
Storage trims the peak, and efficiency lowers the base. JLL studied 4,437 offices in seven global markets and found that the most efficient buildings cost 43% to 75% less to run each year than the least efficient in the same city, a gap worth $1.58 to $5.13 per square foot annually. Across six markets, commercial electricity prices rose 11% to 91% faster than local inflation between 2020 and 2024, according to the JLL analysis of the efficiency premium.
Los Angeles shows the direction of travel: savings from top-performing offices rose 46%, from $2.78 to $4.06 per square foot between 2019 and 2024. JLL cites Lawrence Berkeley National Laboratory projections of $100 billion to $200 billion in cumulative U.S. power system savings by 2040 from grid-interactive efficient buildings. Pairing efficiency upgrades with storage lets one capital plan address both the size of the load and the shape of the peak.
Utility-Scale Findings Carry Property-Level Consequences
The Wood Mackenzie comparison covers utility-scale systems. Onsite storage economics depend on the local tariff, demand charges, interconnection cost and the site’s load shape, so each project needs its own model. The direction of the finding still bears on site decisions:
Time to power. A site waiting years for new utility capacity can add onsite storage to serve load growth in phases while the substation upgrade proceeds.
Demand charges. Storage that shaves peak draw lowers the largest variable line in a tenant’s utility bill, which supports occupancy and rent growth.
Procurement risk. Tariffs take effect in December. Owners comparing quotes should ask vendors who holds tariff exposure, which inverter supplier is specified and what transformer lead times apply.
Valuation. Every $1,000 of durable annual NOI improvement supports about $12,500 of asset value at an 8% cap rate. Demand charge savings that persist through the lease term flow directly into that math.
Frequently Asked Questions
Is battery storage cheaper than gas turbines?
Wood Mackenzie finds four-hour battery storage cheaper than open-cycle gas turbines in all 43 markets where both were modeled, on a utility-scale levelized cost basis.
How long does a gas turbine take to procure?
TechCrunch reports two to four years for open-cycle turbines and waitlists into the early 2030s for closed-cycle turbines.
What did PJM fast-track?
PJM accepted three projects totaling about 2.1 GW: two batteries (860 MW and 800 MW) and a 455 MW gas uprate, all targeting mid-2029 service.
Does the Wood Mackenzie finding apply to onsite storage?
The analysis covers utility-scale costs. Onsite results depend on tariffs, demand charges and interconnection costs at each site.
Sources
https://www.utilitydive.com/news/engie-ls-power-pjm-expedited-interconnection-eit/832613
https://seia.org/research-resources/solar-market-insight-report-q3-2026/
https://www.jll.com/en-ae/insights/the-efficiency-premium-accelerates-in-real-estate
https://www.powermag.com/ansaldo-us-gas-turbine-market-equipment-crunch/
https://www.energy-storage.news/global-bess-failure-rates-declined-98-between-2018-and-2025/