Four-hour battery storage beating gas peaking on cost

Four-hour battery storage is now less expensive than open-cycle gas turbines, according to new research.

Wood Mackenzie’s report on levelised cost of electricity (LCOE) said that advancing technologies and market dynamics continue to drive divergent prices.

“This economic shift is decisive and widening,” said Ahmed Jameel Abdullah, principal analyst at Wood Mackenzie. “Gas turbine shortages and rising fuel volatility are driving up peaking costs, while expanding battery manufacturing continues to push storage costs down.”

The report said that solar PV retains its position as the cheapest power technology in Europe and onshore wind capex is declining at an average annual rate of 2.5%.

Europe carries the highest fossil-fuel generation costs of any region, with levelised carbon costs projected to surpass fuel costs by 2030. Meanwhile, offshore wind costs are expected to decline from the 2030s as supply chains stabilise and turbine prices fall, supported by competitive CfD tenders providing a more predictable demand trajectory.