More than 50 investment projects in Los Cabos and La Paz are on hold because Baja California Sur’s electrical grid cannot supply enough power, according to CANIRAC (the National Chamber of the Restaurant and Seasoned Food Industry) advisor Lorena Hinojosa. Most incoming investors are unable to complete their projects due to insufficient energy capacity in the state’s isolated grid.
Hinojosa said talks have begun with the federal Undersecretary of Economy to identify projects that could strengthen electricity distribution across BCS. The fact that these conversations are only now getting underway points to no quick resolution for a problem that has plagued the state for years.
An Energy Island With No Lifeline
Baja California Sur operates one of Mexico’s few electrically isolated grids. Unlike almost every other state, BCS is not connected to the National Interconnected System (SIN), the main power network stretching from Puerto Peñasco to Cancún. A long-discussed undersea cable through the Sea of Cortez that would have linked the peninsula to the mainland grid has been permanently canceled.
The Federal Electricity Commission (CFE) operates roughly 638 megawatts of installed capacity across several plants in the state, including facilities in La Paz, Los Cabos, and Ciudad Constitución. Most generation sits in La Paz, while Los Cabos consumes the most electricity, driven by its tourism and resort sector. Transmission lines between the two cities already strain under summer loads when air conditioning demand peaks.
A Long Pattern of Blackouts and Bottlenecks
The shortage is not new. In 2019, rolling blackouts across La Paz and Los Cabos prompted the National Energy Control Center (CENACE) to declare a state of emergency. Peak demand has only grown since then. A 2022 analysis found that while BCS had about 620 MW of available energy, peak consumption reached 560 MW, leaving almost no safety margin for equipment failures or demand spikes.
Researchers at the National Autonomous University of Mexico (UNAM) announced in April 2026 that the Baja California Peninsula holds the country’s highest potential for renewable energy generation. Solar and wind farms could meet local demand and end the state’s “energy island” status, UNAM specialists said. But no large-scale renewable projects are yet operational in the southern state.
What This Means for Businesses in BCS
For business owners in Los Cabos and La Paz, the power bottleneck is a concrete barrier. New restaurants, hotels, and commercial developments cannot open if CFE cannot guarantee them an electrical connection. The stalled projects represent lost jobs and delayed services in the two municipalities that anchor most of the peninsula’s economic activity.
With government talks at an early stage and the canceled undersea cable ruling out a grid connection, the timeline for relief remains unclear. The story was first reported by The Cabo Post on April 28.