The industry ministry is reviewing the country's basic energy plan at a time when power-hungry data centers are increasing, amid the spread of artificial intelligence.

The basic energy plan sets the direction of the country's medium- to long-term energy policy and is updated once every three years.

The review is expected to focus on how to position nuclear power plants and renewable energy sources — both of which are effective for reducing carbon dioxide emissions — in the country's power supply mix amid the accelerating global trend toward decarbonization.

The review was launched Wednesday at a subcommittee meeting of the Advisory Committee for Natural Resources and Energy, which advises the industry minister.

Referring to the energy shift away from fossil fuels such as oil and coal, industry minister Ken Saito said at the beginning of the meeting, "Japan is in the most difficult situation since the end of World War II."

"Whether we can ensure a stable supply of non-carbon energy will determine a large part of our country's national power," Saito emphasized.

The government has set a goal of reducing CO2 and other greenhouse gas emissions to effectively zero by 2050. On Monday, it started discussions on a long-term vision for decarbonization toward 2040. It aims to draw up the long-term vision and update the basic energy plan by the end of fiscal 2024, which started in April.

For decarbonization, it is essential for Japan to reduce its reliance on thermal power generation, which accounts for about 70% of the country's total power supply. The current basic plan, compiled in 2021, calls for renewable energy sources to account for 36-38% of the total power supply in fiscal 2030, and for nuclear power plants to account for 20-22%.

At the news conference, Saito noted the increasing importance of dealing with geopolitical risks, given Japan's reliance on imported energy resources.

According to the industry ministry, prices of liquefied natural gas jumped roughly sixfold on average from 2019 to 2022 due to Russia's invasion of Ukraine.

The worsening situation in the Middle East is also overshadowing Japan's energy procurement, as the country imports about 90% of its crude oil from the region.

The energy plan review is expected to include discussions on raising the proportion of power generated from renewable energy sources and the positioning of next-generation nuclear power plants under development in the public and private sectors.

Meanwhile, the use of AI has spread rapidly since the 2021 update of the basic energy plan. Generative AI such as ChatGPT consumes significant amounts of power when processing large volumes of information.

Ensuring a stable supply of electricity is becoming increasingly important in light of projects to build or expand data centers for AI services and to construct plants for producing semiconductors.

According to the Organization for Cross-Regional Coordination of Transmission Operators, which comprises electric power companies, maximum power demand in fiscal 2033 is expected to be 5.37 million kilowatts higher than in fiscal 2023 due to the construction and expansion of data centers and semiconductor factories. This is equivalent to the output of about five nuclear reactors.

Power demand could expand further if growth in the amount of information processed by advanced AI accelerates.

At the same time, the effective use of AI is essential for boosting the international competitiveness of Japanese industries. "We must avoid a situation in which the use of generative AI is hampered by power constraints," says Mitsubishi Research Institute.

The institute noted the need to develop power-saving technologies for semiconductors. But if such measures are not enough to address growing power demand, the think tank said it will be necessary to make preparations, including increasing power output.