Four-Hour Batteries Now Beat Gas Peakers on Cost in 43 Markets

Four-hour battery storage now costs less than electricity from open-cycle gas turbines in every market Wood Mackenzie tracks. The finding was reported on Oct. 9, 2026, covers 43 markets on every continent, and applies to the fast-start turbines favored by many data center developers TechCrunch.

Solar is the cheapest form of new power in every market in the survey. Four-hour batteries, systems that can discharge at full power for about four hours, rank second for peaking applications, or short periods of high demand. Open-cycle gas now sits above both.

Wood Mackenzie predicts the gap will widen. The firm expects battery electricity costs to keep falling while gas turbine electricity costs grow more expensive in the coming decades. In the Middle East and Africa, it projects four-hour batteries will be 33% cheaper than gas peaking by 2035.

Price is only part of the story. Availability has moved against gas. AI data center developers have driven up gas turbine prices by buying available models. Open-cycle units now take two to four years to procure. Waitlists for closed-cycle gas turbines, the more efficient combined type, extend into the early 2030s.

That tight supply has a recent history. Data center demand drove a 66% surge in natural gas power plant costs, as reported in April TechCrunch. Solar panels and batteries have moved the other way over time. Solar panel costs are expected to drop another 30% in the coming decade.

Independent benchmarks point in the same direction. BloombergNEF reported the global benchmark cost for a four-hour battery storage project fell 27% year-on-year to $78 per MWh in 2025 BloombergNEF. Wood Mackenzie reported energy storage costs in China are 55% below its neighbors, a regional spread that matters for supply chains and procurement strategy.

Lazard's Levelized Cost of Energy+ work provides the financial frame many planners use. Levelized cost means lifetime cost per unit of electricity. Lazard describes LCOE+ as the industry's leading annual benchmark for the cost competitiveness of energy generation technologies, and released the 19th edition of the report in 2026. Lazard stated that turbine shortages, rising costs and long delivery times are expected to continue driving steep LCOE increases for gas technologies. Its LCOE analysis uses fuel cost assumptions of $3.45/MMBTU, $1.47/MMBTU and $0.85/MMBTU for gas-fired generation.

Build decisions have not followed the cost curves in a straight line. Sales of small gas turbines are surging as data center builders prioritize speed Reuters. SpaceX's Terafab will rely on natural gas power plants, not Tesla solar panels. That facility is intended to build chips for data centers that will be run by SpaceX and its xAI subsidiary.

Speed explains the difference. Hyperscalers, the largest cloud operators, pairing energy storage with natural gas are able to get power faster, and they are doing so behind the meter, meaning on-site power that connects before the utility meter. U.S. data center operators are increasingly pairing batteries with natural gas for that reason.

The tradeoff is documented. Surging use of small gas turbines for data centers is raising long-term power costs. It is also raising emissions.

In my view, the broader context for infrastructure planners is that the cost crossover does not by itself settle technology choice. Four-hour storage competes directly for peaking and capacity during constrained hours. It does not provide multi-day firming on its own. Gas still offers dispatchable duration, or power on demand for longer stretches, at a higher capital cost, higher fuel exposure, and longer lead time. That is why pairing has become the workable interim setup. Batteries shave peaks, cover interconnection delays, and allow a smaller or later gas commitment, while developers wait for grid upgrades or longer-lead combined-cycle capacity. Over a 30-year career covering capacity cycles from PCs to cloud to AI, I have learned to watch procurement behavior more closely than headline LCOE. Right now procurement says operators will pay a premium to energize quickly, even as the economics of the electrons favor solar plus storage. For tech planners, if battery learning rates hold and turbine backlogs persist, the penalty for choosing speed over cost will grow harder to justify to customers, regulators, and finance, while cheaper storage opens more room to build quickly and cleanly.