Wood Mackenzie reports that four-hour battery energy storage systems now offer a lower levelized cost of electricity than open-cycle gas turbines across 43 analyzed markets. This study covers regions including Europe, North America, Latin America, Asia-Pacific, the Middle East, and Africa, highlighting a shift in power supply strategies for data centers.
In the Middle East and Africa, the cost of four-hour battery storage is approximately $120 per megawatt-hour in 2026, with a projected 33% decline to $80 per megawatt-hour by 2035. China currently holds the lowest grid-scale storage costs globally, sitting more than 55% below the Asia-Pacific average of $134 per megawatt-hour, driven by manufacturing scale.
Data center developers have increasingly turned to gas turbines to bypass grid connection queues. Enverus Intelligence Research estimates that the United States will add 29.6 gigawatts of behind-the-meter gas generation capacity by 2030, with data centers accounting for 88% of this demand. Batteries are now positioned to handle more peak-shaving tasks.
Solar power remains one of the lowest-cost new electricity sources, with single-axis tracking photovoltaics leading in 43 markets and onshore wind in five. While US solar projects face tariff-related cost pressures, 168 gigawatts of utility-scale capacity are protected by safe harbor provisions. Long-term costs are expected to benefit from standardized equipment and local supply chains.
