The “Baja California Energy Outlook 2020–2025” provides a comprehensive analysis of the energy landscape in Baja California, Mexico, shedding light on both the challenges facing the region and the potential avenues for growth and development. It begins by contextualizing the significance of energy for the new administration that came into office in November 2019, emphasizing the importance of understanding the current state of the energy sector, identifying crucial demand drivers, and addressing the challenges ahead.

With a population exceeding 3.3 million and a GDP of approximately US$28.7 billion, Baja California is experiencing steady growth in both demographic and economic terms. This growth inevitably translates into increased energy demand, particularly in the industrial sector, which accounts for a significant portion of the state’s electricity consumption. However, there are notable disparities in consumption patterns across different regions of the state, largely influenced by climatic variations.

Imported natural gas plays a vital role in meeting Baja California’s energy needs, primarily due to its isolation from the national grid and limited access to alternative fossil fuels. The state’s dependence on natural gas underscores the importance of ensuring reliable access to this resource to maintain grid stability and support industrial operations. Despite challenges related to infrastructure and supply, there is a growing acceptance of natural gas as a transitional fuel for decarbonization efforts, driven by factors such as proximity to the United States and favorable pricing.

In addressing the projected shortfall in power generation capacity, the document outlines an “Optimization Scenario” aimed at maximizing the efficiency of existing infrastructure and minimizing the need for substantial investments in new resources. Strategies include upgrading geothermal facilities, implementing advanced metering infrastructure to reduce losses, and promoting participation in energy markets such as the California Independent System Operator (CAISO) Energy Imbalance Market (EIM).

Furthermore, the document emphasizes the untapped potential of renewable energy sources in Baja California, such as wind and solar power. Despite possessing abundant renewable resources, the state’s renewable energy deployment has been slow, hampered by regulatory uncertainties, transmission constraints, and other barriers. However, with clear and stable regulations that encourage private investment, Baja California has the opportunity to not only meet but exceed clean energy targets, enhancing energy security and promoting sustainable development.

Overall, the “Baja California Energy Outlook 2020–2025” serves as a roadmap for policymakers, industry stakeholders, and investors, providing valuable insights into the challenges and opportunities shaping the region’s energy future. By addressing key issues and leveraging its inherent strengths, Baja California can chart a course towards a more resilient, diversified, and sustainable energy sector.