Japan's Power Market News 2024/W36

GX Implementation Council Adapts 40-Year Vision to Address Increasing Demand From Digital Growth Sectors

The Green Transformation (GX) Implementation Council is holding meetings to develop its “GX 2040 Vision”, a new national strategy that will guide #decarbonization and industrial policy up to 2040. The strategy is set to be shaped around #energy supply, industrial location, industrial structure and GX market creation; and in the latest meeting, particular attention was paid to the need to address increasing power demand.?

In the Sixth Strategic Energy Plan, it was forecast that overall energy demand was set to decrease toward 2030 by about 10% - however, the establishment of new energy-intensive semiconductor plants and data centers in recent years has meant that domestic power demand is now expected to rise this year for the first time in nearly two decades, with this trend set to continue. In order to adapt to increased power demand resulting from these growing sectors and other aspects of digital transformation (#DX), the group noted the necessity of facilitating #nuclear power plant re-operation and decarbonization of #thermal power.

Navigating Power Supply and Sustainability

During these discussions, the Council stated that it will work to create a predictable business environment for operators of large-scale decarbonized power generation sources, including nuclear power plant operators. Additionally, whilst overarching long-term GX initiatives include the gradual phase out of thermal power generation, the group acknowledged its importance for back-up supply during the transition to low-carbon power sources, and will work with the private sector to secure more #LNG contracts and ensure power supply stability.?

Regarding data centers, which are expected to be a significant component of increased overall energy demand going forward, the group stated that it would work to develop methods of improving the energy efficiency of these facilities. As the need for #sustainable power sources for intensive industries continues to increase, particularly in light of AI-driven demand, the Government will need to find ways of balancing sustainability and demand. It is expected to produce further guidelines on its GX 2040 Vision related to addressing DX needs by the end of the fiscal year.?

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