Kyushu Faces Significant Power Demand Growth
In an interview with Jiji Press on January 18, 2026, Masaru Nishiyama, President of Kyushu Electric Power Company, revealed a significant forecast for the region's energy future. He projected that electricity demand in the Kyushu region would increase by 20-30% from current levels by 2034, driven primarily by the expansion of Taiwan Semiconductor Manufacturing Company (TSMC) and related industries.
This projection is underpinned by TSMC's semiconductor factory in Kikuyo Town, Kumamoto Prefecture, which began mass production in December 2024. A second factory is currently under construction, and there are discussions about a potential third facility. Semiconductor factories operate 24 hours a day, 365 days a year, consuming enormous amounts of electricity for manufacturing equipment and cooling systems. According to estimates from the Institute of Energy Economics, Japan, the combined power consumption of TSMC's Kumamoto factories (first and second) is expected to reach 300,000-400,000 kilowatts—equivalent to 30-40% of the generating capacity of a typical nuclear power plant.
AI and Data Centers Transform Japan's Power Landscape
The surge in power demand extends far beyond Kyushu. Globally, the rapid expansion of artificial intelligence (AI) and data centers is driving unprecedented electricity consumption. According to the International Energy Agency (IEA), global data center power consumption is projected to double from 2024 levels to approximately 945 billion kWh by 2030—roughly equivalent to Japan's current total electricity consumption.
Within Japan, data center power consumption is forecast to triple from 19 TWh in 2024 to 57-66 TWh by 2034. Wood Mackenzie's analysis suggests that data center peak power demand could reach 6.6-7.7 GW by 2034, representing approximately 4% of Japan's total peak power demand.
AI-optimized servers are particularly power-hungry. Gartner projects that their power consumption will increase nearly fivefold, from 93 TWh in 2025 to 432 TWh by 2030. This explosive growth in AI-related energy demand is fundamentally challenging existing power infrastructure paradigms.
Japan's 7th Basic Energy Plan: A Nuclear Pivot
To address these increasing power demands, the Japanese government approved the 7th Basic Energy Plan in February 2025. This plan marked a significant policy shift—removing the phrase "reduce nuclear dependence as much as possible" that had been included in energy plans since the 2011 Fukushima Daiichi nuclear disaster, and instead emphasizing the "maximum utilization" of nuclear power.
The 2040 energy mix targets are as follows:
- Renewable energy: 40-50% (solar 23-29%, wind 4-8%, hydro 8-10%, etc.)
- Nuclear: approximately 20%
- Thermal power: 30-40%
President Nishiyama praised this plan, noting that it "demonstrates the nation's strong determination." Kyushu Electric has one of the highest nuclear utilization rates in Japan, and its balanced power source composition has resulted in relatively low electricity prices compared to other regions. This cost competitiveness is considered one of the key factors that attracted TSMC to choose Kyushu for its investment.
Renewable Energy and Decarbonization Pressures
Alongside growing power demand, pressure for decarbonization is intensifying. TSMC has announced its intention to power its Kumamoto factory entirely with renewable energy. This commitment stems from demands by major customers like Apple, which requires its suppliers to transition to clean energy.
Kyushu is rich in "non-fossil power sources" (renewables and nuclear), and the government's "GX 2040 Vision" promotes accelerated industrial concentration in regions with abundant decarbonized power. President Nishiyama expressed his ambition: "We want to leverage Kyushu's abundant non-fossil power to contribute to national economic growth and industrial competitiveness."
Infrastructure Challenges
However, adapting to rapid power demand growth requires significant transmission and distribution network upgrades. In Kumamoto Prefecture, near TSMC's facilities, substation expansion work is proceeding at a rapid pace. At Yuge Substation, transformers are being doubled, with capital investment expected to exceed 8 billion yen.
Currently, approximately 90% of Japan's data centers are concentrated in the Tokyo-Osaka metropolitan areas. The government is promoting data center distribution to regions rich in renewable energy through subsidy programs. The "Watt-Bit Collaboration" public-private project aims to comprehensively address data center power consumption challenges by integrating and operating power and communication systems.
Global Context
Globally, the United States and China are expected to account for more than two-thirds of data center power demand. Japan and South Korea together represent about 5% of global data center power consumption, a share projected to remain stable through 2030.
However, Japan's data center penetration remains relatively low compared to the United States. Wood Mackenzie notes: "The question isn't whether Japan will reach similar penetration levels to the US, but how quickly the power system can adapt to support that growth."
Looking Ahead
Kazuhiro Ikebe, former president of Kyushu Electric, previously indicated that supply capacity would be sufficient for "about 10 years" but suggested that power supply from Honshu (Japan's main island) might need to be considered thereafter. President Nishiyama's recent statements underscore the importance of long-term energy strategy planning.
The expansion of the semiconductor industry and AI demand is driving a major transformation in Japan's energy policy. Expanding renewable energy deployment, utilizing nuclear power, upgrading transmission infrastructure, and achieving decarbonization—how Japan balances these challenges will determine its industrial competitiveness and sustainable growth trajectory.
How is your country addressing power challenges related to data centers and AI demand growth? How does the role of nuclear energy and renewables in energy policy differ from Japan's approach? We'd love to hear your thoughts!
References
- https://news.yahoo.co.jp/articles/95e2946b246c182d4ebc80a4ab82014c9b425537
- https://www.meti.go.jp/press/2024/02/20250218001/20250218001.html
- https://www.enecho.meti.go.jp/category/others/basic_plan/
- https://www.jaif.or.jp/information/ai_energy
- https://www.woodmac.com/press-releases/japan-data-centers-power-demand/
- https://www.gartner.co.jp/ja/newsroom/press-releases/pr-20251119-dc
- https://www.spglobal.com/energy/en/news-research/latest-news/electric-power/041025-global-data-center-power-demand-to-double-by-2030-on-ai-surge-iea
Reactions in Japan
Since TSMC came, Kumamoto's economy has definitely improved. But traffic congestion is serious, and with power demand increasing this much, I'm worried if infrastructure development can keep up. Expanding substations is urgent.
Maximizing nuclear power use—does that mean we've forgotten Fukushima's lessons? If we seriously commit to expanding renewables, we should be able to manage without nuclear. I don't see the government's genuine commitment.
A 20-30% increase is a significant number. We need to consider not just transmission network upgrades but also building new power plants. I'm honestly worried whether we can make it in 10 years.
Kyushu Electric's low electricity rates are definitely because nuclear plants are operating. That's one reason TSMC chose Kyushu. I wonder how people advocating for nuclear phase-out think about this reality.
The explosion in data center power demand is a global issue. But Japan's renewable energy ratio is still too low. Isn't a 40-50% target by 2040 too slow compared to Europe?
I welcome economic revitalization from increased power demand. But I don't want regular households to bear that electricity cost. Companies should be asked to pay their fair share.
Kyushu Electric stock looks like it still has room to rise. It's being reevaluated as a TSMC-related stock, and earnings are stable due to nuclear operations. Good for long-term holding.
Feels like Silicon Island Kyushu is making a comeback, which is great. Young people now have a reason to stay in Kyushu. But local companies seem to be struggling with labor shortages. It's not all positive.
It's inevitable that power consumption will explode with AI demand. It's realistic to pursue power source diversification alongside energy-saving technology development. We need scientific discussion, not ideology.
Kikuyo Town has really changed. Population and tax revenue are increasing. But there aren't enough nurseries or schools. Infrastructure needs to cover not just electricity but all aspects of daily life.
I think distributing data centers to rural areas is a good thing. It helps diversify risks from Tokyo concentration and creates local employment. Building them in regions rich in renewables is rational.
We can manage without nuclear power. We've gotten through summer peak demand. Using AI demand as an excuse to promote nuclear is putting the cart before the horse. Please consider the accident risks.
I set up a factory in Kyushu because electricity is cheap. It would be troublesome if prices go up due to increased demand. Please properly balance corporate attraction with stable power supply.
The 20% nuclear target in the 7th Basic Energy Plan is actually a realistic figure. The problem is aging existing plants. Without concrete progress on new construction, we can't achieve this by 2040.
I don't understand the complicated stuff, but please just avoid blackouts. I was on edge when the power shortage warning was issued during last year's heat wave. Stable supply is most important.
TSMC's 100% renewable commitment is a tailwind for us. Investment in mega solar and wind should accelerate. Kyushu has good sunshine and wind conditions, so there's still plenty of potential.
I'm from Taiwan. I'm happy to see TSMC succeeding in Japan. Power issues are serious in Taiwan too—TSMC factories consume several percent of the island's total electricity. I think Kyushu Electric's balanced use of renewables and nuclear is a wise choice.
Data center power demand is a huge issue in the US too. In Virginia, 26% of electricity goes to data centers. I understand Japan reconsidering nuclear power. We're having the same debate here.
Germany completed its nuclear phase-out, but electricity prices have soared and industry is suffering. I think Japan reassessing nuclear is a pragmatic decision. We should look at reality, not ideology.
France gets about 70% of its electricity from nuclear. Japan's shift to 'maximum utilization' of nuclear is the right decision. Nuclear is essential for achieving both decarbonization and stable supply.
Power issues are also becoming serious in the UK due to AI demand. But for a country that experienced Fukushima, I wonder how local residents feel about returning to nuclear promotion. Safety assurance should be the top priority.
As a semiconductor powerhouse, power issues are critical for Korea too. Samsung's factories alone use enormous amounts of electricity. I wish Japan, Korea, and Taiwan could share know-how on stable power supply.
Data centers are rapidly increasing in India too, and power infrastructure can't keep up. Japan's 'Watt-Bit Collaboration' public-private initiative is a good reference for us.
TSMC's commitment to 100% renewables is admirable, but stable supply to data centers requires nuclear or gas backup. We need discussions that face reality.
In Spain, renewables account for about 50% of power sources, but stable supply is still a challenge. Japan's 2040 target of 40-50% renewables seems achievable, but investment in storage technology is also crucial.
Poland is trying to move away from coal dependence. Japan's nuclear utilization is a realistic approach to decarbonization. We're also planning nuclear construction.
From Silicon Valley's perspective, Japan's data center penetration is still low. But it will grow rapidly. Preparation of power infrastructure should start now.
Sweden covers most of its electricity with hydro and nuclear. It seems Japan is aiming for a similar balance. I'd be happy if Nordic experience can be a reference.
In Ireland, data centers consume 21% of electricity, expected to reach 32% by 2026. Japan taking early measures is wise. We fell behind.
China is also utilizing all power sources including nuclear to meet AI and data center power demand. I think Japan's 7th Basic Energy Plan is a realistic answer to the same challenge.
Brazil relies mainly on hydro, but power shortages occur during dry seasons. I keenly feel the importance of having diverse power sources like Japan. Keeping nuclear as an option is wise.