Report | Creating Resilience
Japan Special Report - Smarter, Cleaner, Faster: The Case for Data Center Co-Generation Systems
The introduction of co-generation systems to eliminate electricity wait times and improve investment efficiency
October 1, 2026 15 Minute Read
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- The proliferation of generative AI and growing demand from cloud operators are tightening the data center supply-demand balance in Greater Tokyo. As of Q1 2026, data center occupancy stood at 94%, up 7 pp. from the 2024 figure of 87%. Numerous data center development projects are in the pipeline, with the Greater Tokyo market set to expand to 3.3x its current level.
- As data center capacity increases, so will demand for electrical power. Maximum electricity demand from data centers in Japan is projected to reach approximately 10x its 2026 level by 2035, with the most significant surge in demand expected in Greater Tokyo.
- Securing the super-high voltage power supply required for the establishment of a new data center takes a significant amount of time, with waits of over five years standard in Greater Tokyo, and some developments elsewhere forced to wait up to 10 years. This is due to concentrated demand in Greater Tokyo and the time required to install high-voltage power lines.
- A solution for this issue is the implementation of Co-Generation Systems (CGS) into data center development. CGS data centers command advantages in several areas such as shorter wait times, reduced energy consumption, and lower CO₂ emissions. Challenges include additional initial costs incurred for the installation of electrical generators, and increased maintenance and management costs.
- Self-powered data centers should offer higher project IRR levels than standard data centers connected to the power grid. CBRE expects this to act as an incentive to encourage greater investment in self-powered data centers in the coming years.