Four-hour battery storage is now cheaper than open-cycle gas in all 43 markets modelled, according to Wood Mackenzie’s latest global levelised cost of electricity (LCOE) report.

First, battery costs are low and are continuing to fall. In the Middle East and Africa, four-hour battery storage costs $120/MWh in 2026 and is forecast to fall by 33% to $80/MWh by 2035. Utility-scale solar costs $37/MWh regionally, falling to $24/MWh by 2035.

But the situation is different for gas, partly because of supply-chain constraints. ‘Gas turbine shortages and rising fuel volatility are driving up peaking costs, while expanding battery manufacturing continues to push storage costs down,’ said Ahmed Jameel Abdullah, Principal Analyst, Wood Mackenzie.

Solar PV on single-axis trackers is the lowest-cost new-build generation technology in 43 of the 48 markets modelled, with onshore wind leading in the remaining five. In Saudi Arabia and the United Arab Emirates, solar costs are forecast to fall below $20/MWh by 2033.

Regional findings show battery storage LCOE in Latin America falling by a forecast 42% by 2060. In the Asia-Pacific region, China’s grid-scale storage costs are more than 55% below the regional average of $134/MWh. In Europe, turnkey battery storage capital costs rose by 2%, the first increase in three years, while North American solar faces pressure from tariffs and supply-chain restrictions.

‘The structural shift we are tracking is no longer just about renewables becoming competitive,’ Abdullah said. ‘It is about storage and solar together redefining what the economics of a power system look like.’

Renewables to become dominant source of electricity by 2035

Renewable energy is expected to become the dominant source of global electricity by 2035, according to Statkraft’s 2026 Green transition scenarios report.

The report examines four possible pathways to 2050, forecasting that global electricity consumption could increase by between 50% and more than 100%, depending on the pace of electrification and other developments.

‘In a turbulent world marked by growing geopolitical tensions, trade barriers and major regional differences, electricity is increasingly becoming the foundation for competitiveness, energy security and industrial growth,’ said Torjus Folsland Bolkesjø, Head of Global Energy Drivers, Statkraft.

Statkraft said expanding grids, storage and flexibility will be essential to support electrification. Electric vehicles use 60–90% less energy than combustion-engine vehicles, while heat pumps can reduce heating energy use by 50–80%.

However, the report warns that even its greenest scenario falls short of the 1.5°C climate target without further emissions reductions after 2050.

In Europe, renewables accounted for 48% of electricity generation in 2025, up from 38% in 2021, although the region still imports 57% of its energy. Statkraft also projects that data centres could account for 6–9% of EU electricity demand by 2050.

IRENA calls for faster electrification to keep energy transition on 1.5°C pathway

Electrification powered by renewables must accelerate over the coming decade to bring the global energy transition back into line with the 1.5°C climate target, according to the International Renewable Energy Agency (IRENA).

Its World energy transitions outlook 2026 report warns that renewable additions alone are insufficient, with grid development lagging behind and energy efficiency improvements falling short of what is needed.

IRENA predicts that global installed renewable power capacity would need to increase from 5.2TW today to around 38.2TW by 2050. Electricity would need to account for 35% of final energy consumption by 2035 and more than 50% by 2050, with solar and wind supplying over 80% of electricity by mid-century.

‘We cannot deliver the transition by simply adding renewables to an unchanged energy system,’ said Francesco La Camera, Director-General, IRENA, highlighting the need for investment in electrification, grids, storage, flexibility and energy efficiency.

Under IRENA's 1.5°C scenario, global economic growth would be 1.1% higher annually than under business as usual, generating cumulative gains of around $46tn by 2050. Renewable energy employment could rise more than fivefold from just over 16 million jobs today. End-user electricity prices could also be 15% lower by mid-century.

Delivering the transition would require around $10.3tn in investment over 2026–2050, according to the report. IRENA identifies priorities including grid modernisation, integrated energy planning, stronger investment strategies and international cooperation.

Global reliance on imported energy to peak by 2034, says Rystad Energy

Global reliance on imported energy is projected to peak by 2034 as energy security concerns accelerate electrification, according to a recent Rystad Energy report.

The report examines three pathways to 2050, reflecting different approaches to energy security, affordability and emissions reduction.

Under its ‘Pragmatism’ scenario, dependence on imported fossil fuels among net-importing countries falls from around 40% today to 26% by 2050. The figure falls to 14% under ‘Climate first’ and 33% under ‘Fossil first’.

However, reducing reliance on imported oil and gas could create new supply-chain dependencies. China accounts for 96% of solar wafer capacity, 95% of cathode materials and 78% of battery cell production, according to the report.