Cost-Optimal Decarbonization Pathways for Data Centers in Japan: A Bottom-Up Model Integrating Location, Energy Systems, and Carbon Pricing

This study develops a bottom-up cost optimization model (DC-DECOM) to evaluate decarbonization pathways for Japan’s data center industry, targeting carbon neutrality of the information and communications technology (ICT) sector by 2040. The model represents Power Usage Effectiveness (PUE) as a dynamic function of ambient temperature and cooling technology, and integrates technology selection, regional energy supply, and carbon pricing within a single cost-minimization framework. Three scenarios are compared: a reference case (REF), a centralized carbon-neutral scenario (C-CN) that restricts new capacity to metropolitan areas, and a regional decentralization scenario (R-CN) that allows for nationwide siting. Input parameters are calibrated against data from the International Energy Agency (IEA), the Uptime Institute, Japan’s Ministry of Internal Affairs and Communications (MIC) White Papers, and the Japan Science and Technology Agency (JST). The R-CN scenario achieves the 2040 net-zero target at 18–23% lower total system cost than C-CN. The cost gap decomposes into four channels (cooling-energy reduction ∼35%, lower regional renewable procurement cost ∼30%, lower carbon cost ∼25%, and lower siting-related cost ∼10%). Sensitivity analysis identifies the carbon-price trajectory and the hardware-efficiency improvement rate as the most influential parameters; the R-CN advantage remains positive across all ±1σ parameter variations and across two combined-scenario stress tests.