News On Japan

Japan Eyes Fines for Data Centers as Power Demand Surges with AI Growth

TOKYO - The Ministry of Economy, Trade and Industry convened a panel of experts to discuss Japan’s national energy policy, focusing on how to address the expected rise in electricity demand driven by the spread of artificial intelligence and other technologies. A central topic was the energy consumption of data centers, which has raised growing concerns.

Among the measures under consideration is a plan to encourage data centers to be distributed more evenly across the country to ease the concentration of energy use. In addition, for new facilities built from fiscal 2029 onward, the ministry has proposed setting standards for power usage efficiency. If those standards are not met, operators would be required to submit rationalization plans, effectively imposing penalties aimed at curbing excessive electricity consumption.

Japan is undergoing a significant transformation in its digital infrastructure, driven by the escalating demand for artificial intelligence (AI), cloud computing, and data-intensive applications. The nation is witnessing a surge in data center developments, with both domestic and international players investing heavily to expand capacity and enhance technological capabilities.

NTT Global Data Centers Japan, in collaboration with TEPCO Power Grid, has initiated the construction of a substantial data center campus in Shiroi City, Chiba Prefecture. The first facility, known as Shiroi Data Center (SHR1), is projected to offer 24 megawatts (MW) of capacity upon its completion in April 2027. This development is part of a broader 50MW campus designed to support AI, cloud computing, and next-generation digital services .

In a pioneering move towards sustainable infrastructure, a Japanese consortium comprising NTT Facilities, Eurus Energy, MUFG, and Nippon Yusen is planning to construct a floating data center in Yokohama. Scheduled to commence in the fall of 2025, this containerized facility will be powered by renewable energy sources, including solar and potentially offshore wind power. The initiative aims to demonstrate the feasibility of offshore data centers operating entirely on renewable energy .

The Kansai region is also experiencing significant developments. SoftBank Corp., in partnership with OpenAI, intends to repurpose Sharp Corp.'s former LCD panel plant in Osaka into a large-scale AI data center. With an anticipated power capacity of 150MW, the facility is expected to become operational in 2026. The collaboration aims to commercialize OpenAI's AI agent model in Japan, providing customized AI solutions for client companies .

International tech giants are making substantial investments in Japan's data center landscape. Microsoft has announced a $2.9 billion investment to enhance its AI data centers in the country. This includes integrating advanced AI semiconductors into existing facilities and establishing an AI and robotics research lab in Tokyo. The initiative also encompasses an AI training program for three million Japanese workers over three years, aiming to bolster the nation's AI capabilities and cybersecurity measures .

Oracle Corp. is committing over $8 billion over the next decade to meet the growing demand for AI and cloud infrastructure in Japan. The company plans to expand its presence by developing sovereign-cloud operations tailored for government entities, emphasizing the importance of secure cloud infrastructure for national security .

The Japanese government is actively supporting the decentralization of data centers to regions with abundant low-carbon energy sources. As part of the "GX 2040 Vision," efforts are underway to relocate tech industries, including data centers and semiconductor factories, to areas near offshore wind farms and nuclear plants. This strategy aims to achieve sustainable growth by integrating energy efficiency with industrial competitiveness .

In terms of capacity expansion, Tokyo is set to add over 1.3 gigawatts (GW) of new data center capacity, while Osaka will see an addition of 440MW. The western Tokyo region alone is expected to contribute more than 400MW to the upcoming segment. These developments are part of a broader plan to add more than 500MW of power capacity in Japan's upcoming data centers, bringing the total capacity to 1.5GW .

Collectively, these initiatives underscore Japan's commitment to advancing its digital infrastructure, ensuring the nation remains at the forefront of technological innovation and sustainable development.

Source: テレ東BIZ

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