How could the shift toward cheaper battery storage affect ExxonMobil's gas operations?
Cheaper battery storage may challenge ExxonMobil's gas market position The Wood Mackenzie survey indicates a decisive economic shift in energy generation across 43 markets, including those in the Middle East and Africa. The report states that battery storage is now cheaper than open-cycle gas turbines, and predicts that in the Middle East and Africa, four-hour batteries will be 33% cheaper by 2035, displacing gas peaking on cost across every gas market in the region. Furthermore, the report notes that solar is now the cheapest form of new power in every market surveyed, and that the market for U.S. natural gas is expected to narrow in the coming decade. This trend suggests a long-term reduction in the demand for natural gas used for power generation, which is a core component of ExxonMobil's business.
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How it reaches ExxonMobil
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Wood Mackenzie surveyed markets across the Middle East, North America, and Africa on October 9, 2026, finding that four-hour duration batteries are less expensive than open-cycle gas turbines in all 43 markets surveyed. The consultancy predicts that the cost of electricity from batteries will continue to decline, while electrons from gas turbines will become more expensive in the coming decades.
The full event1independent outlet -
The report also notes that the market for U.S. natural gas will narrow in the coming decade. As battery storage and solar become cheaper alternatives to gas turbines, the overall demand for natural gas power generation is expected to decrease, impacting the market for major producers like ExxonMobil.
No report states this step directly. Brind drew it from the reporting on each side of it, so treat it as an informed guess.
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The facts so far
As reported. Each one links to where it comes from.
- On every continent and in each of the 43 markets surveyed, four-hour duration batteries were less expensive than open-cycle gas turbines.techcrunch.com
- In the Middle East and Africa, four-hour batteries will be 33% cheaper by 2035, displacing gas peaking on cost across every gas market in the region.techcrunch.com
- Solar is now the cheapest form of new power in every market in Wood Mackenzie’s survey.techcrunch.com
- The market for U.S. natural gas will narrow in the coming decade.techcrunch.com
Why it matters
For ExxonMobil, natural gas is a foundational element of its global energy portfolio and revenue stream. The structural shift detailed by Wood Mackenzie—where cheaper battery storage and solar power are displacing gas-fired peaking plants—represents a fundamental challenge to the long-term viability and profitability of gas assets. This trend is not limited to specific regions but is observed across the 43 markets surveyed, indicating a broad, systemic pressure on the fossil fuel power generation sector.
This transition is part of a wider global movement toward decarbonization, accelerated by falling technology costs. While gas turbines are currently being driven up in price by AI data center developers, the report shows that this cost increase is being countered by the rapid decline in battery and solar costs, suggesting that the economic shift toward renewables is decisive and widening.
What we don't know yet
- How quickly will the cost decline of battery storage continue in the surveyed markets?
- What regulatory measures will be implemented in the Middle East and Africa to manage the displacement of gas peaking plants?
What would change this answer
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Questions worth asking
Ideas the web ties closely to this story that the explainer doesn't mention. These are prompts for your own research: Brind hasn't answered them.
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About EMEA Europe
Given that the economic shift is observed across 43 markets, how is the energy transition progressing in Europe compared to the Middle East and Africa?
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Who else could feel it
Other possible ripples from the same event.
- FEDLikelyRising energy costs and structural shifts could influence the Federal Reserve's inflation outlook.
- ShellPossibleShell's fossil fuel operations may face long-term cost challenges
- JapanPossibleGlobal energy transition may reshape Japan's import reliance on natural gas
- NigeriaPossibleNigeria's energy costs may face pressure as battery storage displaces gas peaking power
- LG Energy SolutionPossibleBattery cost decline may boost demand for LG Energy Solution's storage
Reporting
- techcrunch.comOct 9
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Brind's analysis is written by AI from the reporting linked above and can be wrong. This explainer is a possibility worth considering, not a forecast: steps marked as Brind's reasoning are not stated in the reporting. It is not investment advice; do your own research.