The Japanese Government has announced plans to encourage industries, including data centers and semiconductor factories, to locate near low-carbon energy hubs.

Japan's Prime Minister Shigeru Ishiba announced the “GX 2040 Vision” at the Yomiuri International Economic Society event on December 22, 2024.

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Ishiba Shigeru – Japan Cabinet Public Relations Office

The plan will support relocating data centers and other technology industries near carbon-neutral energy hubs, such as offshore wind farms and nuclear plants.

“We must integrate energy efficiency with industrial competitiveness to create sustainable growth opportunities,” said Ishiba.

The government will put the plan up for public comment and then make a cabinet decision in 2025.

A cornerstone of the strategy is the revival of Japan’s nuclear energy sector, which suffered significantly following the 2011 Fukushima nuclear accident. Following the disaster precipitated by the devastating 2011 Tōhoku earthquake and tsunami, public sentiment towards the energy shifted with protests urging for nuclear power to be abandoned.

However, as Japan becomes overly reliant on energy imports, the Government has begun to incentivize the revival of the sector. Its stated aim is for nuclear power to provide 20-22 percent of Japan’s electricity by 2030.

Japan currently has 33 nuclear power plants classified as operable. However, due to regulatory requirements enacted by the country’s Nuclear Regulation Authority in 2013, only ten have received regulatory clearance to restart.

The Japanese government has said it will address community concerns with economic incentives for municipalities neighboring nuclear facilities.

Nuclear energy has become a hot topic in data center circles over 2024, with Amazon Web Services and Microsoft signing off-take agreements with nuclear plants to power their operations. Due to nuclear power's consistent power generation profile and low carbon footprint, data centers see it as a crucial power source moving forward, especially as power demands increase.

In addition, the plan aims to support the expansion of renewable energy to complement nuclear power and meet the increasing demand for electricity driven by artificial intelligence.

Japan’s renewable sector primarily consists of solar energy, with the country's installed solar capacity being the third largest in the world. However, despite significant wind potential, the country has yet to build out capacity. The government has set an ambitious target of deploying 10GW of offshore wind capacity by 2030 as part of its goal of achieving net zero emissions.

The initiative aims to address Japan’s prolonged economic stagnation while positioning decarbonization as a growth engine.

Japan has invested heavily in its data center and semiconductor industries over recent years. In November, it announced plans to invest approximately $65 billion to support the country’s semiconductor and AI industries.

The initiative, which will run until the end of the decade, is expected to generate ~$104bn in public and private investment during the period.