Data Center Market Update 2: OCCTO’s 10-Year Demand Forecast

Data Center Growth Intact, but Grid Constraints Slow the Timeline

The latest 10-year demand outlook (FY2026 – FY2035) published by Organization for Cross-regional Coordination of Transmission Operators (OCCTO) on January 21, 2026, showed that Japan’s electricity demand is still expected to grow over the next decade, but the realization of (DC) and semiconductor-driven demand is increasingly back-loaded. While the combined incremental peak demand from DCs and semiconductor fabs is projected to reach around 7.6 GW by FY2035, exceeding the previous forecast, project delays and plan revisions have pushed much of the energy demand growth into the later years of the outlook.

OCCTO’s forecast methodology continues to count DC and semiconductor projects on a case-by-case basis, with firm inclusion for projects that have progressed to grid connection cost agreements and probabilistic inclusion where general transmission operators assess a high likelihood of realization. Even so, reflecting recent plan changes, DC peak demand is now expected to remain below the previous forecast through around FY2033, before overtaking it from FY2034 onward. By FY2035, DC peak demand is projected at roughly 6.6 GW, with DC power consumption reaching about 49 TWh, both higher than in the prior outlook’s final year.

For FY2026, total peak demand across the 10 areas is forecast at 159.6 GW, with power consumption projected at 803.4 TWh. While the effects of population decline and continued energy efficiency are expected to persist, the overall trend toward higher demand remains intact, supported by economic growth and new DC and semiconductor plant developments.