Japan companies adopt next-gen geothermal tech to expand site options

Japanese companies, including Mitsubishi Corp., are adopting next-generation geothermal technology to expand the scope of candidate sites for power generation. This move aims to meet growing electricity demand from data centers and overcome limitations of traditional geothermal power sources, which are typically found in hot springs or mountainous regions. The new techniques would allow for power generation from a wider range of locations.

Japanese companies, including Mitsubishi Corp., are adopting next-generation geothermal technology to expand the scope of candidate sites for power generation. This move aims to meet growing electricity demand from data centers and overcome limitations of traditional geothermal power sources, which are typically found in hot springs or mountainous regions. The new techniques would allow for power generation from a wider range of locations.

According to a report by Think GEOENERGY, Japan's installed geothermal power capacity increased to 601 MW at the end of 2025, up from 576 MW at the end of 2023 [1]. This growth is driven by the commencement of operations at the Minami-Kayabe geothermal power plant in Hokkaido, which is Japan's largest binary cycle geothermal facility at present.

The adoption of next-generation geothermal technology is a strategic response to the country's broader decarbonization strategy. Japan, endowed with the world's third-largest geothermal resources, is actively seeking to expand its geothermal energy sector. However, community engagement and environmental concerns have historically limited development. Approximately 80% of the country's geothermal resources are located within national parks, where strict environmental regulations have historically limited development [1].

To address these concerns, the government is now promoting next-generation geothermal technologies, such as "closed-loop" systems, which extract heat without affecting underground water sources. These systems minimize environmental impact and alleviate concerns of hot spring operators [1].

The Ministry of Economy, Trade, and Industry (METI) aims to elevate geothermal energy's contribution to 1% by 2030 and up to 2% by 2040. To facilitate this, METI plans to introduce new support measures, including financial incentives for small and medium-sized geothermal projects and the establishment of agreements between local authorities, power companies, and residents to streamline project development [1].

Locally, the Matsuo-Hachimantai Geothermal Power Plant in Iwate Prefecture north of Tokyo is a prominent example of geothermal efficiency. Operational since 1995, this facility generates around 50 MW of electricity – enough to power over 100,000 households. The plant utilizes steam drawn from deep underground reservoirs, channelling it directly into turbines to produce electricity [1].

Despite challenges such as regulatory restrictions and local opposition, these plants show that geothermal power beyond onsen tourism has a role to play in Japan’s path to energy resilience and carbon neutrality in the future [1].

The global geothermal power market is expected to grow at a CAGR of 22.6% during the forecast period (2024-2031), driven by advancements in technologies and increasing demand for sustainable power generation [2]. Companies such as Calpine, Gradient Resources, and Enel Spa are major players in this market, focusing on strategies such as new product launches and expansion into emerging markets [2].

In conclusion, Japanese companies' adoption of next-generation geothermal technology is a significant step towards meeting growing electricity demand and achieving the country's decarbonization goals. This strategic move not only addresses environmental concerns but also expands the scope of candidate sites for power generation, making geothermal energy a more viable and sustainable option for Japan's future energy mix.

References:
[1] https://www.intellinews.com/japan-the-land-where-ancient-geothermal-use-is-part-of-the-problem-383898/
[2] https://www.openpr.com/news/4037368/geothermal-power-market-growth-trends-opportunities-2025