Key Facts
• In 2025, nuclear power regained prominence amid decarbonization efforts.
• The 7th Basic Energy Plan in February emphasized “maximum utilization of nuclear power.”
• Local consent achieved for restarting existing reactors; new and next-gen reactors under review.
• First reactor dismantling began in decommissioning work.
• Japan Nuclear Industry Association survey: “Good” sentiment rose 6 points to 15%, “Normal” 53%, “Bad” dropped 11 points to 32% in FY2025.
• January 20, 2026: Tokyo Electric Power Company (TEPCO) restarts Kashiwazaki-Kariwa Nuclear Plant Unit 6.
• Offshore wind power projects faced setbacks; Mitsubishi Corporation and Chubu Electric subsidiaries withdrew due to inflation and supply chain issues.
• Large-scale solar power subsidies effectively ended by late 2025.
• Major city gas companies abandoned US synthetic methane projects, shifting to lower-cost alternatives.
• Green hydrogen costs from renewable power remain a significant challenge.
• ENEOS shifted from synthetic fuel using green hydrogen to bio-based fuels due to cost and supply concerns.
• Japan Energy Economics Research Institute forecasts 2026 inflation rate to drop from ~3% to 1.9% due to energy price declines and yen appreciation.
• Industry leaders urge government to build institutional frameworks to support projects despite rising costs and inflation.
Summary
The year 2025 marked a pivotal shift in Japan’s energy sector, with nuclear power making a strong comeback supported by the 7th Basic Energy Plan and local approvals for reactor restarts and new developments. This revival contrasts sharply with the challenges faced by renewable and new energy sources, which struggled under global inflation, yen depreciation, and supply chain constraints. Offshore wind projects saw major withdrawals, and subsidies for large solar plants were cut. Synthetic methane and green hydrogen initiatives faced cost pressures, prompting strategic pivots. ENEOS’s move toward biofuels highlights the difficulty of relying on expensive green hydrogen. Despite a forecasted easing of inflation in 2026, industry leaders emphasize the need for robust policy support and institutional frameworks to sustain decarbonization efforts amid ongoing cost volatility. The restart of TEPCO’s Kashiwazaki-Kariwa Unit 6 in early 2026 is seen as a critical step toward stable, low-carbon energy supply and market price stabilization.
