Fifteen years after the Fukushima nuclear accident, Japan launches a "nuclear power revival."

Fifteen years after the Fukushima nuclear accident, Japan launches a "nuclear power revival."

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About fifteen years after the Fukushima nuclear accident, the Takashi government has made nuclear restart and the construction of next-generation reactors central to its policy agenda. Morgan Stanley believes the conditions for a nuclear revival in Japan are now mature.

According to Chase Trading Desk, Morgan Stanley released a research report on March 29 stating that the Takashi government’s nuclear policy centers on two major directions: accelerating the restart of existing nuclear plants and advancing the development and deployment of next-generation advanced reactors.

A stable political landscape provides strong momentum for this policy, and the power and construction industries are the most direct beneficiaries. Nuclear restart directly reduces the fuel costs of thermal power, while large construction contractors receive ongoing orders from supporting engineering works for the restart.

Among these, Hokkaido Electric’s key catalyst is the restart of Tomari Unit 3, which is currently expected to begin trial operation as early as July 2027. Meanwhile, there is considerable upside potential for long-term power demand in the Hokkaido region—driven by AI data centers and next-generation semiconductor factory location needs. In construction, Kajima Construction has historically dominated the construction of most nuclear units in Japan, handling the majority of projects for 33 operating reactors, giving it a significant first-mover advantage in technical qualifications and market positioning.

Current status of Japanese nuclear power: 33 reactors, 14 have restarted

Japan currently has 33 nuclear reactors, with a total power generation capacity of 33.08 million kW (33.08 GW). As of December 31, 2025, the status of nuclear units is as follows:

Restarted: 14 units, total capacity 13.25 million kW, mainly including Kansai Electric (7 units), Kyushu Electric (4 units), Shikoku Electric (1 unit), Tohoku Electric (1 unit), Chugoku Electric (1 unit);Approved by the Nuclear Regulation Authority (NRA) safety review but not yet restarted: 4 units, including Hokkaido Electric Tomari Unit 3, Tokyo Electric Kashiwazaki-Kariwa Units 6/7, Japan Atomic Power Tokai Unit 2;Undergoing NRA safety review: 8 units;Not yet submitted for safety review: 10 units.

In addition, there are currently two reactors under construction: Chugoku Electric’s Shimane Unit 3 (ABWR, 1.37 million kW) and J-Power’s Ohma Nuclear Power Station (ABWR, 1.38 million kW), both in the NRA review stage, with operational dates undecided.

Regarding nuclear power generation, in fiscal year 2024 (F3/24) nuclear power generated 84.1 billion kWh, accounting for 9% of total generation, about nine times higher than fiscal year 2014, mainly driven by the continuous increase in the number of restarted reactors.

Policy framework: The seventh strategic energy plan sketches grand nuclear ambitions

In February 2025, the Japanese government adopted the seventh strategic energy plan through a cabinet resolution, clarifying the direction for nuclear policy:

Existing nuclear plants: promoting public-private cooperation to accelerate the restart process;R&D and deployment of next-generation innovative reactors: building advanced next-generation reactors at sites where operators have decided to decommission reactors;Frontier technology research: advancing development of advanced light water reactors, small light water reactors, fast neutron reactors, high-temperature gas-cooled reactors (HTGR), and nuclear fusion energy.

For emission targets, Japan has set a goal to reduce greenhouse gas emissions in fiscal year 2041 by 73% compared to fiscal year 2014—2014 emissions were 1.395 billion tons, meaning by 2041 they must drop to 377 million tons; while actual emissions in 2024 are still as high as 1.017 billion tons, requiring a further reduction of 63% (640 million tons) to reach the target.

Regarding power generation targets, the seventh strategic energy plan requires total generation in fiscal year 2041 to increase to 1.1–1.2 trillion kWh (estimated 985.4 billion kWh in fiscal year 2024), and nuclear power’s share must rise from the current roughly 8.5% to about 20%.

Takashi administration’s new nuclear policy: Stable governance accelerates progress

On February 8, 2026, Sanae Takashi led the Liberal Democratic Party to victory in the House of Representatives election, and a stable regime provides solid political support for advancing nuclear policy.

On February 20, 2026, Prime Minister Takashi made clear the following in a policy speech to the parliament:

Ensure domestic energy self-sufficiency;Government and industry cooperate to accelerate nuclear restart;Promote concrete plans for R&D and deployment of next-generation reactors;Advance the practical application of nuclear fusion energy at the fastest pace in the world.

Morgan Stanley believes, recent revisions to certain NRA review processes (such as re-examining the "five-year rule") are early signs of a directional shift in Japan’s energy policy. Analysts will focus on discussions on 17 strategic areas held by the "Japan Growth Strategy Committee" established in the Cabinet Secretariat, especially concerning resources, energy, GX (green transformation), and policies for AI and semiconductors.

Mid- to long-term nuclear power scenario analysis: new build demand could reach as high as 25 GW

F3/41 total power generation scenarios:

  • Optimistic scenario: 1.2 trillion kWh;
  • Baseline scenario: 1.1 trillion kWh;
  • Pessimistic scenario: 1.0 trillion kWh (additional demand from AI data center construction is lower than expected).

F3/41 nuclear power generation demand scenarios:

Assuming an 80% nuclear capacity factor, under the baseline scenario (nuclear power share 20%, total generation 1.1 trillion kWh), required nuclear generation for F3/41 is 220 billion kWh, corresponding to installed capacity needed of 31 million kW (31 GW).

F3/41 existing nuclear power capacity scenarios:

  • Optimistic scenario: 30 million kW (all 33 reactors operate 60 years, 29 are in operation then);
  • Baseline scenario: 19 million kW (average of optimistic and pessimistic);
  • Pessimistic scenario: 9 million kW (only the eight reactors already approved for 60 years continue operation, the other 25 retire at 40 years).

Combining these scenarios, the range of additional nuclear installed capacity needed in F3/41 is 0 to 25 million kW (0 to 25 GW). In the baseline scenario (demand: 31 million kW, existing: 19 million kW), 12 million kW need to be added; if each new reactor is 1 million kW, 12 new reactors must be built.

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