JStories — Japan, one of the world’s most volcanically active countries, has the world’s third-largest geothermal resource potential, estimated at 23 gigawatts, trailing only the United States and Indonesia. That is roughly equivalent to the output of 23 typical nuclear reactors, each generating about 1 gigawatt.
Yet Japan’s installed geothermal capacity totals only about 0.5 gigawatts — just 2% of its potential. Long development timelines, land-use restrictions and the need to coordinate with local hot spring operators have long stood in the way.
Now, a new kind of renewable energy business is taking root in Kyushu, aiming to put the region’s abundant geothermal resources to work for the communities that sit above them.
The effort centers on the Waita hot spring area, at the foot of Mount Waita, straddling the border of Kumamoto Prefecture’s Aso District and Oita Prefecture’s Kusu District. Furusato Netsuden, a geothermal developer based in Oguni Town, Kumamoto Prefecture, is pursuing a community-based model of geothermal development led by representative director Kazuyuki Akaishi. Under the model, residents themselves profit from their local geothermal resources and use that income to address local challenges.
Other developers had previously tried to build geothermal projects in the area, but concerns among hot spring landowners and residents about the possible depletion or cooling of their hot spring sources made agreement difficult. The discord split the community — even leading to the cancellation of the 700-year-old Takenoyu Bon Odori festival — and earlier projects stalled.
Akaishi, who saw major potential in the region’s abundant geothermal resources, drew on his experience managing bulk electricity contracts for apartment buildings to persuade landowners who opposed the project. He worked with them one by one, gradually building consensus. A shared goal — creating a town attractive enough that residents’ children and grandchildren would want to return — gave Akaishi and the community common ground.
In 2011, 30 households in the area formed an organization called Waita-kai, and the Waita No. 1 geothermal power plant was launched. Furusato Netsuden supports the group with fundraising, asset management and operations, and the plant’s fixed income is funneled back into the community to fund infrastructure improvements, education and tourism development.
Building on the success of Waita No. 1, the Waita No. 2 geothermal power plant came online in March 2026 with the aim of addressing challenges across Oguni Town. The plant has an installed capacity of about 4,995 kilowatts and generates roughly 35 million kilowatt-hours a year, enough to supply about 8,950 households.
“Our business isn’t simply about increasing power generation.The goal is community-building,” Akaishi said. His commitment to geothermal power in the region is rooted in a formative experience from the coal-mining region of his native Hokkaido.
“I grew up hearing stories from my grandparents’ generation about how the town thrived on its coal mines — there were even a movie theater and a bowling alley, and the whole place was full of energy. There was a time when turning underground resources into money brought vitality to the region,” he said. Drawing on that formative experience, as well as the success of the Oguni Town project, Akaishi is now also pursuing geothermal development in Teshikaga, Hokkaido.
Still, geothermal development faces ongoing challenges. Under Japan’s feed-in tariff system, the guaranteed purchase period for geothermal power is 15 years. “After that period ends, the buyback price can drop sharply even though there’s still plenty of underground resource and equipment capacity left. Geothermal is social infrastructure. We need incentive structures designed around project lifespans of 30 to 35 years for a long-term, stable power source,” Akaishi said.
In September 2025, Baseload Capital, a Sweden-based company that develops geothermal projects worldwide, announced a strategic investment in Furusato Netsuden, citing the potential for geothermal resource development in Japan. Baseload Capital’s shareholders include Breakthrough Energy Ventures, founded by Bill Gates, and Google.
“Take Google as an example — data centers using AI need electricity around the clock,” Akaishi said. “As the world shifts toward greener data centers, geothermal power can generate electricity steadily day and night, unlike solar or wind power, which are affected by weather, season and time of day. Given its high capacity utilization rate, geothermal power holds great promise as a baseload power source.”
The Japanese government also views geothermal power as an important domestic baseload energy source. Last year, the Ministry of Economy, Trade and Industry announced a plan to develop next-generation geothermal power — which does not require hot spring areas — at 118 locations nationwide by 2050, with the aim of expanding capacity to 7.7 gigawatts, equivalent to about seven nuclear reactors.
“People say Japan lacks resources. But regions have not only geothermal resources, but also forests and other resources. If companies respect and work alongside local communities, resource development will accelerate,” Akaishi said.
“If we can build greater recognition of the value of geothermal power’s stable supply and pursue policies that allow geothermal development to coexist with local communities, regions will start to move. And once regions start to move, society will change. We aim for the day when what we’re doing becomes the global standard,” he said.
Translated by Mark Goldsmith
Edited by Mark Goldsmith
Top photo: Furusato Netsuden
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