Battery Storage Becomes Cheaper Than Natural Gas Turbines Used by Data Centers
A new report from Wood Mackenzie reveals that battery storage is now cheaper than open-cycle gas turbines used at many data centers across all continents and in 43 surveyed markets. The cost of electricity generated via batteries is expected to continue declining, while the costs for natural gas turbines are projected to rise due to increasing energy prices and high demand driven by AI development. Open-cycle gas turbines, often used as peaking power plants during periods of high demand, have become more expensive both in procurement time and operation. The rising cost of gas turbines is also affecting utilities, with waitlists for closed-cycle models extending into the early 2030s. In contrast, solar remains the cheapest new energy source globally, though it faces challenges from tariffs in North America. The report highlights a significant economic shift toward battery storage and renewable sources like solar, particularly in regions such as the Middle East and Africa where batteries are expected to be significantly cheaper by 2035.
Topics: Battery Storage Data Centers Electricity Demand Natural Gas Plants Solar Energy