A Kansai Electric Power Co. and U.S.-based CyrusOne joint venture will build a new, large-scale data center in Minoh in northern Osaka Prefecture, sources said.
Construction is set to begin this autumn or later, with completion expected around 2029, according to the sources. Against the backdrop of the rapid spread of generative AI, demand for data communication is expanding, and the major Japanese electric firm aims to increase the number of its data center locations to create a new revenue stream.
The large-scale data center, known as a hyperscale data center, will be built in the eastern part of Minoh. The four-story facility will have a total floor area of approximately 30,000 square meters.
In 2023, KEPCO and CyrusOne, a major data center developer and operator, established the joint venture CyrusOne KEP to develop and operate hyperscale data centers. They announced in 2024 that their first project would be the construction of a hyperscale data center in Seika, Kyoto Prefecture. The project in Minoh will be their second initiative.
Demand for hyperscale data centers, which process large volumes of data, is expected to grow, particularly among the big tech companies collectively known as GAFAM. Securing a stable supply of large amounts of electricity is essential for operating these facilities, and KEPCO can leverage its expertise in power supply and site selection.
CyrusOne KEP aims to invest more than 1 trillion yen by the early 2030s to build new data centers with a total power receiving capacity of 900 megawatts -- equivalent to the output of one typical nuclear power reactor.
KEPCO is also engaged in the development and operation of other types of data centers -- such as smaller-scale urban data centers located within office buildings -- through its telecommunications subsidiary, Optage Inc. Data centers are used for managing corporate and local government systems as well as for cloud services, and KEPCO aims to attract a broad range of customers by deploying a diverse array of data centers.
In the Kansai region, new data centers tend to be built primarily in Osaka Prefecture, which has high concentration of businesses, as data center latency decreases the closer the facility is to where the data is used.
KDDI Corp. began operations in January on the site of the former Sharp Corp. factory in Sakai, Osaka Prefecture. NTT Data Group Corp. also aims to begin operations in Ibaraki, Osaka Prefecture, by fiscal 2027.
On the other hand, there have been instances where residents near planned data center construction sites have opposed them due to concerns, including those about environmental impact and noise.
Guidelines formulated in May by the Japan Data Center Council -- composed of major data center operators -- recommend providing thorough explanations to local governments and residents starting from the planning stage. KEPCO also plans to seek understanding from residents regarding its project in Minoh through various ways such as holding explanatory meetings.
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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