Battery storage is now cheaper than the natural gas turbines long used to keep data centers running through power interruptions, according to new cost analyses. Lithium-ion battery costs have fallen more than 90 per cent in a decade while turbine prices have stayed flat or risen.
The finding lands as Microsoft, Google and Amazon race to build AI computing capacity, creating a power crunch that has data center operators scrambling for every available megawatt. BloombergNEF reports the levelized cost of combined-cycle gas turbines has hit a record $102 per megawatt-hour, while 4-hour battery project costs fell 27 per cent to $78 per megawatt-hour.
Wood Mackenzie's modeling goes further, finding that 4-hour storage now undercuts open-cycle gas in all 43 markets it analyzed - a milestone that could reshape how the industry plans backup power.
The shift matters beyond data centers: as batteries win on economics, the economics of the broader grid transition tilt further toward storage paired with renewables over new gas plants.
