Nuclear and geothermal are making a comeback on the back of strong data center demand. Jan Yong examines the unfolding trend.
Japan’s data centers will consume as much electricity as 15 million to 18 million households by 2034, driving 60 per cent of the country’s total power demand growth. This will triple electricity consumption from 19 TWh (Terawatt hours) in 2024 to 57 TWh to 66 TWh by 2034, according to Wood Mackenzie’s report ‘Japan’s data centre gold rush: the battle to power a data-driven future’.
“Peak demand from data centres is expected to reach 6.6 GW (gigawatt) to 7.7 GW in 2034, hitting 4 per cent of Japan’s total peak load and representing a threefold increase from 2024 levels,” the report states.
However, there is a critical mismatch between demand growth and supply development timelines. A typical combined-cycle gas turbine project typically takes seven to 10 years to complete compared to hyperscalers deployment schedules of under five years.
“This explains why infrastructure bottlenecks are pushing major data centre and chip foundry projects to 2029,” says Naomi Oshita, research associate, Asia Pacific power & renewables at Wood Mackenzie.
Data centers are expected to account for 7 per cent of the power load in the Tokyo and Kansai regions by 2030. Fortunately, the gradual rollout of these facilities suggests that immediate power shortages are unlikely, as reserve margins remain above 15 per cent.
According to Wood Mackenzie, coal and gas installations will dominate these regions, representing over 40 per cent of capacity by 2034. This creates challenges for hyperscalers’ carbon neutral commitments. At the same time, Japan’s renewable energy transition adds complexity to meeting data centre power requirements.
“The decarbonisation challenge is particularly acute given the scale of data centre demand growth,” says Oshita. “With renewables (solar and wind) reaching only 17 per cent by 2030, Japan will need to accelerate nuclear restarts and renewable deployment to meet both climate goals and hyperscaler sustainability requirements.”
Nuclear and geothermal are particularly attractive due to their ability to produce a stable power supply. The Japanese government also offers subsidies to build zero-carbon facilities near low-carbon hubs.
Japan plans to achieve carbon neutrality by 2050. By then, it is projected that offshore wind power will become the main renewable energy source in Japan supplying 33 per cent of total renewables. The rest are likely to come from nuclear and geothermal.
Nuclear comeback
Japan closed down most of its nuclear plants after the Fukushima Daiichi disaster in 2011, resulting in a huge drop in nuclear output. The energy shortfall was replaced mostly by fossil fuel like coal and gas.
Four years after the disaster, the first nuclear reactors were restarted underpinned by stricter new regulations. As of early 2026, 15 out of 54 pre-Fukushima reactors were operating supplying a third of its pre-2011 electricity.
Moving forward, the government plans to rebuild and replace aging reactors by the 2040s. Companies are also exploring Small Modular Reactors (SMRs) which are smaller, safer, faster to deploy and can be built right next to energy-heavy sites.
Nuclear energy is imperative because traditional renewables like solar and wind are not sufficient. Foreign hyperscalers like Amazon, Google and Microsoft require stable, constant and large amounts of power to run their huge data centers. As a clean energy with little carbon footprint, nuclear aligns with the hyperscalers’ zero-carbon and net-zero ambitions.
Geothermal Innovations
Japan is blessed with lots of geothermal energy thanks to its location within the volcanic and tectonic Pacific Ring of Fire. Geothermal is clean energy that can run around the clock.
As of March 2025, the country generated about 618 MW of electricity which the government plans to double to 1,500 MW by 2030.
After the Fukushima incident, in an effort to shift reliance to other renewables, the government amended several strict laws on natural parks that had previously restricted geothermal development. It also provided economic incentives to promote geothermal energy utilization, as well as made efforts to raise social acceptance.
As a result, the private sector ramped up exploration of advanced technologies to unlock the nation’s deep geothermal potential sparking a wave of innovation in the sector.
Legacy geothermal plants use underground steam to spin turbines to create electricity, a slow and expensive process made worse by locals’ concerns over the effects of the equipment and drilling on the spring water.
Hence, some developers like Baseload Power Japan are utilizing next-generation drilling including deep underground imaging and millimeter-wave drilling adapted from nuclear fusion research.
Other advanced geothermal systems include closed-loop systems and supercritical geothermal technology. Essentially, all these systems target heat sources far below conventional reservoirs to increase efficiency and output, thus expanding the nation’s geothermal potential.
This article has previously appeared in Issue 12 of cloud and datacenter magazine.