Wood Mackenzie’s latest global report reveals that four-hour battery storage has become less expensive to install than open-cycle gas turbines in all 43 markets where both were analyzed. This shift is driven by advancing technologies and market dynamics, with battery storage costs forecast to fall further by 2035, particularly in regions like the Middle East and Africa.
The report highlights that in the Middle East and Africa, where utility-scale solar already leads at $37 per megawatt-hour (MWh), four-hour battery storage costs are expected to drop 33% to $80/MWh by 2035, outcompeting gas peaking plants. China sets the global benchmark for storage costs, with prices more than 55% below the Asia Pacific average due to manufacturing scale. Ahmed Jameel Abdullah, principal analyst at Wood Mackenzie, attributed this trend to gas turbine shortages, rising fuel price volatility, and expanding battery manufacturing capacity.
This economic transformation extends beyond storage to baseload power economics. Single-axis tracker solar is now the lowest-cost new-build technology in 43 of 48 modeled markets, with onshore wind leading in the remaining five. In highly competitive markets like Saudi Arabia and the UAE, solar levelized cost of electricity (LCOE) is projected to fall below $20/MWh by 2033, underscoring the rapid cost declines reshaping global power generation.
Wood Mackenzie’s comprehensive reports cover Europe, North America, Latin America, Asia Pacific, and the Middle East and Africa, providing detailed insights into the evolving cost dynamics of solar, wind, and battery storage technologies worldwide.