Japan is at a critical juncture in its energy transition. After nearly six years of declining consumption, electricity demand rebounded in fiscal year (FY) 2024, and despite a projected dip in FY 2025, it is expected to resume growth through 2034. This is indicated by the country’s FY 2025 Electricity Supply Plan, compiled by the Organization for Cross-regional Coordination of Transmission Operators (OCCTO) and submitted to the Ministry of Economy, Trade and Industry (METI) earlier this year. The shift is driven primarily by the proliferation of data centres and semiconductor fabrication facilities, part of Japan’s broader push for digital and industrial competitiveness. This demand growth occurs as the nation pursues its Green Growth Strategy, which targets achieving carbon neutrality by 2050.

Japan’s energy policy framework is rooted in the S+3E principle – safety, energy security, economic efficiency, and environmental sustainability – a comprehensive approach that emerged after the 2011 Fukushima nuclear accident to balance reduced fossil fuel imports, competitive electricity markets and deep decarbonisation. This framework now faces its most demanding test as coal-fired generation phases out and renewable energy scales up. The country is pursuing an ambitious infrastructure expansion programme. Generation capacity is projected to expand from 327.27 GW in 2025 to 366 GW by 2034, driven almost entirely by solar and wind (accounting for 95 per cent of the total addition). To support grid stability amid rising variable generation, the country is witnessing unprecedented investment, not only in transmission but also in battery energy storage systems (BESSs), with at least USD2.6 billion committed to Japanese storage projects since December 2023.

METI’s proposed Wide-Area Grid Long-Term Policy (Master Plan 2023) projects JPY6 trillion-JPY7.9 trillion in grid investments by 2050. This initiative aims to address inadequate grid connections that currently lead to solar curtailments by doubling regional grid capacity and enhancing interregional electricity transfer, particularly from renewable-rich areas like Hokkaido and Kyushu to high-demand regions such as Tokyo. Under this framework, the transmission network will add 401 km of new lines (in addition to reinforcement of several existing lines) and 32,018 MVA of transformer capacity through 2034, according to the latest supply plan.

This infrastructure push reflects Japan’s restructured electricity sector, which underwent three phases of reform beginning in 2013 that dismantled the vertically integrated regional utility model. Today, generation, transmission and retail functions operate independently, with OCCTO coordinating cross-regional grid operations and planning. Yet, even the planned investments may prove insufficient if demand continues its upward trajectory and thermal retirements accelerate faster than anticipated.

Power sector overview and existing infrastructure

Japan’s electricity demand has followed a volatile trajectory over the past decade. After peaking at 900.9 TWh in FY 2017, national consumption declined to 862.6 TWh in FY 2023, driven by an ageing population, sluggish economic growth following the post-2011 nuclear shutdown, and Covid 19 pandemic uncertainty. However, FY 2024 marked a reversal, with demand rebounding to 869.7 TWh. This uptick signals a fundamental shift driven by manufacturing resurgence and the rapid proliferation of energy-intensive digital infrastructure.

The country’s installed generation capacity was 324.16 GW in FY 2024, with thermal power dominating at 46 per cent (145.96 GW). Liquefied natural gas (LNG) led with 79.98 GW, reflecting Japan’s post-2011 shift toward gas, while coal accounted for 52.46 GW. Nuclear capacity totalled 33.08 GW, though much remained offline pending regulatory approval, resulting in a 30.6 per cent capacity factor. Solar was the fastest-growing source at 76.70 GW, nearly 24 per cent of capacity under feed-in tariff (FIT) incentives. Hydropower contributed 49.37 GW, offering zero-carbon generation and grid flexibility. Wind remained limited at 5.94 GW, though future offshore wind (OSW) projects promise growth.

Japan’s electricity grid is complex and regionally segmented. Several AC and DC ties connect the 10 regional transmission and distribution zones, from Hokkaido in the north to Okinawa in the south, forming the backbone of the national supply, carrying power across long distances. Frequency and high-voltage direct current (HVDC) converter stations connect the eastern and western 50 Hz/60 Hz systems. Presently, the total transfer capacity between the two frequency zones is about 3.1 GW, but ongoing development aims to add roughly 2 GW by 2030. As of FY 2024, the grid comprised about 38,482 km of lines at 110 kV and above, supported by 635,988 MVA of transformer capacity. Overall length has remained stable in recent years, reflecting targeted reinforcement and asset renewal rather than expansion.

Future plans

Generation

Japan’s electricity supply infrastructure is set for major transformation through 2034, driven by shifting demand dynamics. OCCTO projects national demand to dip to 849.6 TWh in FY 2025 before rising steadily to 876.1 TWh by FY 2029 and 894.4 TWh by FY 2034. This rebound requires significant capacity additions, with total generation capacity expected to expand by 38,730 MW (11.8 per cent) from 327,270 MW in 2025 to 366,000 MW in 2034. The growth underscores Japan’s goal of ensuring supply adequacy while accelerating its shift from fossil fuels.

Solar PV will lead additions, rising from 79,810 MW in 2025 to 104,940 MW by 2034, while wind nearly triples from 7,240 MW to 19,080 MW. Coal capacity will decline from 51,550 MW to 46,950 MW as inefficient units retire, while LNG increases from 80,160 MW to 85,750 MW, serving as the main backup for variable renewables. Nuclear remains unchanged at 33,080 MW, reflecting restart uncertainty. Batteries grow from 570 MW to 2,250 MW, and hydrogen-ammonia co-firing adds 690 MW by 2034.

OSW plans

Japan’s OSW sector is among the most ambitious elements of the nation’s renewable energy strategy. The 2020 OSW Industrial Vision set interim targets of 10 GW by 2030 and 30-45 GW by 2040. As of 2024, 5.1 GW of projects are in development, though substantial acceleration is needed to meet the 2030 goal. Japan’s fixed-bottom programme has advanced through three competitive auction rounds under the Re-Energy Sea Area Utilization Act (April 2019), which created a unified framework for long-term ocean area occupancy, allowing developers to secure 30-year site leases. The first round (2021) awarded 1,688 MW at JPY11,990-JPY16,490 per MWh under the FIT scheme. By the third round (2024), 1,065 MW was awarded at just JPY0.03 per MWh under the feed-in premium (FIP) scheme, with zero-subsidy bids highlighting improving project economics. The shift from FIT to FIP has intensified competition and encouraged market-oriented revenue models through PPAs and capacity market participation. Floating OSW remains in the demonstration phase but is strategically vital, as 80 per cent of Japan’s OSW potential lies in waters deeper than 50 metres. As of 2025, two demonstration turbines totalling 5 MW are operational, and in June 2024, the government approved two additional projects exceeding 15 MW each.

Japan’s OSW ambitions face challenges, including the lack of domestic large-scale turbine manufacturing, limited installation vessel capacity, and grid constraints in resource-rich regions such as Hokkaido and Tohoku. Complex regulations involving multiple stakeholders also extend development cycles to five to seven years before construction.

Scaling up transmission infrastructure development

Over the next decade, Japan plans to add 401 km of new transmission lines, decommission 88 km of ageing infrastructure and add 32,018 MVA of transformer capacity. The centrepiece of OCCTO’s infrastructure strategy involves strengthening interregional transmission corridors that historically constrained power exchange between Japan’s regional utilities. These projects are collectively designed to enhance system resilience and facilitate renewable energy flow from generation-rich regions to demand centres.

Beyond the immediate transmission reinforcements outlined in OCCTO’s supply plan, Japan’s grid transformation hinges on a comprehensive framework of wide-area grid development plans that shift from reactive, pull-type facility formation, where grid expansion follows generation connection requests, to proactive, push-type infrastructure development guided by long-term cost-benefit analysis. This strategic pivot, formalised in the 2023 Master Plan, identifies critical interregional corridors requiring HVDC transmission to accommodate renewable energy flows that will far exceed local consumption capacity.

OCCTO’s master plan envisions five major HVDC corridors spanning Japan’s archipelago. This includes three HVDC links in the eastern region, connecting Hokkaido, Tohoku and Tokyo. In the western region, two additional HVDC projects will strengthen resilience and renewable integration: the Chugoku–Kyushu interconnection across the Kanmon Strait and a potential Kyushu–Shikoku link addressing the latter’s constrained grid capacity.

The eastern region development represents the most technically ambitious and capital-intensive component of Japan’s grid modernisation strategy. OCCTO’s analysis reveals that Hokkaido and Tohoku are projected to develop renewable energy capacity, particularly OSW, that will significantly exceed regional demand, with Hokkaido’s 28.9 GW of capacity facing just 7.9 GW of local demand, and Tohoku’s 60.9 GW confronting 20.3 GW of consumption. Transmitting this surplus to Tokyo, where 72.1 GW of demand will be served by 67.8 GW of renewable capacity, requires unprecedented interregional power flows facilitated by HVDC technology capable of long-distance, high-capacity submarine cable transmission.

The eastern region reinforcement architecture comprises three interconnected HVDC corridors with a combined capacity of 10-14 GW:

  • Hokkaido–Tohoku (Japan Sea route): 4 GW HVDC submarine cable spanning approximately 600 km, designed to transmit Hokkaido’s OSW generation to Tohoku’s AC system.
  • Hokkaido–Tohoku (Pacific route): 2 GW HVDC submarine cable covering approximately 300 km, providing route diversity and resilience.
  • Tohoku–Tokyo: Dual HVDC links totalling 8 GW; 4 GW via Japan Sea route (400 km) and 4 GW via Pacific route (500 km), connecting northern generation to Tokyo consumption.

This distributed HVDC configuration addresses multiple technical constraints simultaneously. Hokkaido’s AC system faces synchronous stability limitations that restrict single HVDC connection capacity to 1 GW units, necessitating multiple converter stations to aggregate the region’s wind resources. Tohoku encounters similar synchronous stability challenges in its northern grid, where renewable energy concentration threatens to exceed the system’s ability to maintain frequency control during disturbances. The dual-route design also enhances resilience, mitigating the risk of a single HVDC outage isolating substantial renewable capacity.

Two projects within this wide area grid development framework have advanced to the tendering and detailed planning stages, representing Japan’s first large-scale HVDC procurements since the Hokkaido–Honshu link expansion completed in 2019:

Hokkaido–Honshu interconnection facility (Japan Sea route): This 2 GW, 800 km HVDC undersea cable (USC), initially designated as part of the 4 GW Japan Sea corridor in the master plan, entered formal development planning in July 2022 following a national government request to OCCTO. The project received basic requirements approval in April 2024, with qualified business operators now under consideration and implementation plans expected by the end of 2025. Estimated construction costs range from JPY1.5 trillion-JPY1.8 trillion, with a 6-10 year construction timeline positioning commercial operation post 2034. On completion, it will be one of the world’s longest point-to-point HVDC submarine cables. Converter stations will be strategically located in Hokkaido and Tohoku, with the Hokkaido-side connection designed to aggregate multiple 275 kV collector systems consolidating OSW generation.

Chugoku–Kyushu interconnection project: The 1 GW Chugoku–Kyushu HVDC interconnection addresses both renewable integration and system resilience in western Japan. Initiated at national government request in 2024, the project responds to Kyushu’s persistent renewable curtailment issues – the region already curtails solar and wind generation at rates exceeding 12 per cent annually – while simultaneously diversifying interregional connections beyond the existing Kanmon overhead AC interconnection line, which is vulnerable to simultaneous outage during severe weather events. The project will deploy DC USC to traverse the Kanmon Strait’s urbanised corridor where overhead line routing proves infeasible. Estimated at JPY441.2 billion with an 11-13.5 year construction period, the link is designed with scalability to 2 GW to accommodate future renewable expansion. Implementation plans and cost-sharing arrangements are under finalisation, targeting commercial operation in 2039.

OCCTO evaluated multi-terminal HVDC configurations enabling direct DC connections among Hokkaido, Tohoku and Tokyo, which would reduce the number of AC/DC converter stations. However, technical uncertainties led to the adoption of two-terminal designs. Two-terminal configurations limit fault impacts to specific segments, either Hokkaido–Tohoku or Tohoku–Tokyo, while multi-terminal systems without DC circuit breakers risk total network shutdown. Additionally, maintenance on two-terminal links affects only the relevant section, providing greater operational flexibility. Multi-terminal systems also have limited operational experience internationally. OCCTO permits qualified bidders to propose multi-terminal configurations provided they address technical risks and reliability considerations, leaving open future possibilities as the technology matures.

Beyond interconnection corridors, OCCTO has planned several transmission and substation projects to support renewable energy integration, particularly in the Tohoku region, where multiple 500 kV projects are under development.

Conclusion

Japan’s path to carbon neutrality demands flawless execution. With demand rising after years of decline and coal capacity retiring, the nation must rapidly scale renewables while building critical transmission links. The timely implementation of OCCTO’s infrastructure blueprint will help the country achieve its energy security and climate ambitions.