4-hour storage cheaper than gas peakers across global markets: WoodMac

A new analysis from Wood Mackenzie finds that battery storage systems able to discharge power for four hours straight are now cheaper to build and run than natural gas "peaker" plants — the gas-fired units utilities turn on during periods of high demand — in markets around the world, including the United States. In the U.S., for projects starting up in 2026, four-hour battery storage costs 65% to 75% less than new gas peakers, depending on whether a state charges for carbon emissions.

The shift is driven partly by growing power demand from data centers, which is straining the supply of gas turbines. The three major turbine makers have years-long order backlogs, and turbine prices are expected to keep climbing through 2027. Meanwhile, battery manufacturing is expanding and pushing storage costs down. Solar is also getting cheaper and is now the lowest-cost new power source in most of the markets Wood Mackenzie studied.

This is a big-picture shift in how utilities plan to meet electricity demand, not a direct homeowner program. But it matters for your bills: as utilities lean more on batteries and solar instead of expensive new gas plants, it can affect how electricity costs trend over time in your area. The report does flag one wrinkle for homeowners — tariffs and import restrictions are pushing up prices for home solar panels, with further increases expected in 2027 and 2028, even as big utility-scale solar projects are more insulated from those cost hikes.