Batteries Are Taking the Gas Peaker's Best Hours

OilPrice.com · Leon Stille · 2026-11-05 21:00 UTC

Australia's CSIRO now finds that batteries are cheaper than new gas plants for meeting routine evening peaks, as battery costs fall and turbine costs rise.

Gas peakers have always had one decisive economic advantage: they were relatively cheap to build.

A peaking plant could sit idle for most of the year, then start when demand and electricity prices surged. Its fuel was expensive and its efficiency often mediocre, but low upfront costs made that acceptable. The owner did not need thousands of operating hours to recover an enormous initial investment.

Australia has now crossed an important threshold. The country’s CSIRO, working with the Australian Energy Market Operator, finds that batteries have become cheaper than gas for supplying routine peak demand. Four-hour battery systems have moved below open-cycle gas turbines on capital cost, while their operating characteristics are better suited to the short, sharp evening peaks increasingly created by abundant daytime solar.

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