How could the shift in power generation costs affect Shell's traditional operations?
Shell's fossil fuel operations may face long-term cost challenges Wood Mackenzie's survey found that battery storage is now cheaper than open-cycle gas turbines across 43 surveyed markets. This economic shift is predicted to displace gas peaking on cost in the Middle East and Africa, where four-hour batteries are expected to be 33% cheaper by 2035. As Shell operates within these gas markets, the increasing cost and declining competitiveness of gas-fired power generation could challenge the long-term economic viability of its traditional fossil fuel assets.
- Effect
- Mild negative
- How direct
- Brind's reasoning
- When
- Over the long term
- The story
- Gone quiet
How it reaches Shell
-
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 -
In the Middle East and Africa, the report states that four-hour batteries will be 33% cheaper by 2035, which is predicted to displace gas peaking on cost across every gas market in the region. As a major gas company, Shell's operations are tied to the economic health of these gas markets.
No report states this step directly. Brind drew it from the reporting on each side of it, so treat it as an informed guess.
-
British multinational oil and gas company
Everything about Shell
Tap any step to see the evidence behind it.
The facts so far
As reported. Each one links to where it comes from.
- Four-hour duration batteries were less expensive than open-cycle gas turbines in all 43 markets surveyed.techcrunch.com
- In the Middle East and Africa, four-hour batteries will be 33% cheaper by 2035.techcrunch.com
- Solar is now the cheapest form of new power in every market in Wood Mackenzie’s survey.techcrunch.com
Why it matters
Shell, as a major multinational oil and gas corporation, relies heavily on the continued demand and profitability of fossil fuels, including natural gas. The findings suggest a structural, long-term shift in global energy economics where cheaper, scalable renewable technologies like batteries and solar are directly undercutting the cost-effectiveness of traditional gas-fired power generation.
This trend is part of a wider global movement toward decarbonization, accelerated by rising energy prices and increasing electricity demand from sectors like AI data centers. The report also notes that the market for U.S. natural gas is expected to narrow in the coming decade, indicating broader market contraction for gas-based energy sources.
What we don't know yet
- How quickly will the adoption of battery storage accelerate in the Middle East and Africa?
- Will the rising costs of gas turbines lead utilities to accelerate investment in alternative power sources?
What would change this answer
— Other considerations
Beyond this explainer
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.
-
About EMEA Europe
How does the energy transition in Europe compare to the trends observed in the Middle East and Africa regarding the displacement of gas peaking?
Explore connected ideas
Each opens in Related concepts: what the web connects to it, with Brind's news on it.
The ideas come from how millions of web pages place them near each other. The questions are Brind's AI reasoning, written only from this explainer and Brind's own reporting.
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.
- 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
- ExxonMobilPossibleCheaper battery storage may challenge ExxonMobil's gas market position
- LG Energy SolutionPossibleBattery cost decline may boost demand for LG Energy Solution's storage
Reporting
- techcrunch.comOct 9
Keep going
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.