Japan’s decision to restart nuclear reactors heralds a major shift in its approach to addressing multifaceted challenges. For an economy that recorded its first real GDP contraction in six quarters, the move could strengthen economic resilience, enhance energy security and advance decarbonization goals.
A key factor, making nuclear power pivotal to energy security, is its capacity to deliver large volumes of continuous, clean and reliable electricity.
In contrast to intermittent, weather-dependent renewable sources such as wind and solar, nuclear plants provide firm baseload power and work 24×7. This reliability is crucial for an advanced economy like Japan, which needs a stable electricity supply to bolster industrial competitiveness.
Nuclear is a zero-emission clean energy source and has successfully been deployed by several leading economies, including America. Nuclear-generated electricity in the US avoids 470 million metric tons of CO2 emissions annually, the equivalent of removing 100 million cars off the roads, in addition to reducing several harmful air pollutants.
Facing geographical constraints for large-scale renewable deployment, nuclear restarts could reduce Japan’s reliance on imported coal and liquefied natural gas, which cost $68 billion last year and accounted for 60-70% electricity generation – helping Tokyo to mitigate geopolitical risks and limit exposure to external shocks and supply chain disruptions.
For power-intensive AI data centers – where electricity demand is expected to increase five-fold by 2035 – Japan’s emphasis on nuclear energy can translate into grid stability and a diversified power supply – thanks to its advantages such as reliability, high energy density, scalable power output, low carbon emissions and enhanced land use efficiency.
But given that nuclear alone cannot meet the looming power surge, Japan must also accelerate investments in renewables to build a robust energy system.
In this context, SEMI’s three priority actions – removing permitting delays, overcoming land-use challenges and reducing market uncertainties – could stimulate local economies, scale up the system’s resilience and cut costs while strengthening Japan’s industrial competitiveness against global peers.
The country’s revised energy strategy maps out an actionable roadmap to achieve long-term goals. By targeting nuclear and renewables to account for 20% and 50% respectively of the energy mix, the plan provides policy stability for businesses – promoting decarbonization, ensuring stable power supply and reinforcing industrial capacity to drive economic growth.
Prime Minister Sanae Takaichi wants to curb large solar projects, arguing they could damage Japan’s natural environment and increase Tokyo’s reliance on solar panels on foreign countries, particularly China.
Beijing dominates manufacturing and supply chains for solar panels and wind turbines and is rapidly ascending into a powerhouse in nuclear energy with substantial investments in fusion.
Japan’s push to reduce dependence on China-made solar panels has led to Takaichi administration’s action to end financial support and tighten regulations on mega renewable energy projects and promote next-generation technologies like perovskite solar cells and nuclear fusion.
But her ambitions confront several headwinds. These technologies are still in early stages of development, sparking concerns that Takaichi’s bets could sideline Japan’s climate and renewable-energy ambitions.
Studies suggest that perovskites are unlikely to match conventional solar photovoltaics (PV) on cost price and performance by 2040. For perovskites, durability is the key hurdle: they are yet to become stable enough to operate outdoors for decades.
With next-generation reactors carrying a hefty price tag and most experts projecting that fusion needs at least another 20 to 30 years to develop into a commercial reality – an overemphasis on these technologies could divert investments from economically and technologically proven renewables, whose capacity is set to double to 4,600GW by 2030.
Solar PV alone is likely to account for 80% of this growth due to cost efficiency, wider social acceptance and faster permitting.
Nuclear energy can deliver high-capacity, low-carbon baseload power; its financial and construction challenges can’t be ignored. According to the US Energy Information, the levelized cost of electricity (LCOE) for advanced nuclear power stood as high as $110/MWh (megawatt-hour) in 2023 and is predicted to remain unchanged through 2050.
In comparison, the LCOE of solar PVs is likely to drop from $55/MWh to $25/MWh for the same period. Even France, the world’s second-largest producer of nuclear energy that sources about 70% of its electricity from the industry, aims for renewables to account for 33% of its energy mix by 2030.
Japan’s pivot to nuclear and perovskite is a forward-looking response to an increasingly volatile geopolitical environment and domestic topographical barriers to deploy renewables at scale.
This futuristic approach contributes to strengthening economic resilience by lowering electricity cost, cutting dependence on imported fuel and fortifying energy security, self-reliance and climate action.
Yet as these technologies will take decades to fully mature, downplaying established significance of traditional renewables now risks leaving Japan behind in a sector central to economic competitiveness.
This policy imprecision could undermine Tokyo’s ability to navigate immediate challenges, such as economic stagnation and inflation – to which electricity prices are a major contributor.
Tokyo’s goal, therefore, shouldn’t be choosing between nuclear and renewables but to sequence them intelligently: using nuclear restarts and conventional renewables as near-term stabilizers to contain energy costs while next-generation technologies mature and lay the foundation for Japan’s long-term economic and climate resilience.
Azhar Azam is a geopolitical analyst with a focus on economy, climate change and international security. His work has been published in several global media outlets, including Al Jazeera, South China Morning Post, Asia Times and Express Tribune.