Japan Projects Nuclear Power to Be Cheaper Than Thermal Power by 2040

Tokyo, Japan – Japan’s industry ministry announced on Monday that nuclear power is expected to become cheaper than thermal power generation by fiscal 2040 due to rising costs associated with carbon emissions.

The projection was presented to a working group advising the industry minister ahead of the government’s release of a revised basic energy plan.

The ministry forecast that nuclear power generation will cost between 16.40 and 18.90 yen per kilowatt-hour (kWh), up from the previous estimate of 14.50 yen, due to increased expenses for plant construction and safety measures. However, the projected costs for accident management have been revised downward.

In contrast, thermal power generation using liquefied natural gas (LNG) is expected to cost 20.20 to 22.20 yen per kWh, nearly double the fiscal 2030 estimate. The increase is attributed to the rising costs of acquiring carbon dioxide emission quotas and higher LNG prices.

Impact on Other Power Sources

• Coal power generation costs will also rise as Japan factors in the use of hydrogen and ammonia fuels, as well as investments in carbon capture and storage (CCS) technologies.
• Business-use solar power is estimated to cost a minimum of 15.30 yen per kWh. However, frequent output curtailments during daytime could increase the cost to 36.90 yen—significantly higher than the 2030 projection.

The ministry’s latest cost analysis reflects ongoing efforts to balance Japan’s energy supply mix while addressing global warming concerns and managing electricity oversupply from renewable energy sources.

The findings are expected to play a key role in shaping discussions about Japan’s power supply strategy through fiscal 2040, which ends in March 2041.