Wood Mackenzie’s latest global report on levelized cost of electricity (LCOE) shows that advancing technologies and market dynamics continue to drive divergent prices, with four-hour battery storage now less expensive than open-cycle gas turbines in all 43 markets where both technologies were modeled.

In the Middle East and Africa, where utility-scale solar already leads at $37/MWh, four-hour storage is forecast to fall a further 33% to $80/MWh by 2035, displacing gas peaking on cost across every gas market in the region. China remains the global storage cost benchmark at more than 55% below the rest of Asia Pacific average, illustrating how manufacturing scale is redrawing the global cost map.

“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.”

Abdullah noted a similar transformation has already reshaped baseload economics. Single-axis tracker solar is now the lowest-cost new-build technology in 43 of 48 modeled markets, with onshore wind leading in five. In the most competitive markets, Saudi Arabia and the UAE, solar LCOE is on track to fall below $20/MWh by 2033.

The Wood Mackenzie reports cover the regions of Europe, North America, Latin America, Asia Pacific and the Middle East and Africa.

Solar PV with single-axis tracking remains the lowest-cost generation technology in Latin America in 2026, with average costs expected to fall 38% by 2060. Brazil, Chile and Mexico hold a structural cost advantage driven by world-class solar resources and high-capacity factors.

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