CFE Develops Proyecto Oasis BCS, a Solar-Battery-Hydrogen Microgrid for Isolated Baja California Sur
CFE is building Proyecto Oasis BCS in Mulegé: a 72 MW solar plant, batteries and green hydrogen for 40,000 homes on Mexico’s isolated BCS grid.
Photo by Deane Bayas on Pexels
Mexico’s Comisión Federal de Electricidad (CFE) is developing “Proyecto Oasis BCS,” an integrated renewable microgrid combining solar power, battery storage and green hydrogen for the Mulegé region of Baja California Sur, Mexico News Daily reported on September 17, 2026. The project targets an isolated grid area with no connection to Mexico’s National Interconnected System and historically dependent on diesel generation, and is expected to supply electricity to about 40,000 households.
CFE Director General Emilia Calleja presented the project in June 2026, describing it as part of the utility’s push toward “a clean, efficient, and self-sufficient supply” for regions with no access to the national grid. According to CFE’s official project description, cited by Mexico News Daily, Proyecto Oasis BCS combines a 72-megawatt (MW) photovoltaic plant, a 20 MW battery energy storage system (BESS), 20 MW of electrolyzers to produce green hydrogen, and 6 MW of fuel cells that convert the hydrogen back into electricity.
How the isolated-grid system works
Baja California Sur is the only Mexican state not connected to the National Interconnected System, according to Mexico Business News. The state runs two separate electrical systems: the Baja California Sur Electrical System, covering Loreto to Los Cabos, and the smaller Mulegé Electrical System in the north, where Proyecto Oasis BCS is sited. Because all electricity consumed there must be generated locally, the region has relied on diesel and fuel oil generation to meet demand, particularly during peaks.
The design uses solar generation during daylight hours, with batteries covering short-term gaps between generation and demand. A portion of daytime solar output also runs the electrolyzers, producing hydrogen that is stored and later converted back to electricity in fuel cells during hours without sunlight or during periods of peak demand. Mexico Business News described the approach as addressing “the critical balancing act required for the state’s completely isolated electrical grid.”
Households served, water supply and emissions
CFE’s project description states that Proyecto Oasis BCS will supply electricity to approximately 40,000 households and provide 120 cubic meters of water to the local population, drawing on water treated after use in the electrolysis process. The utility also states the project will avoid the annual consumption of about 23,000 cubic meters of diesel and fuel oil.
On the resulting emissions avoided, the two sources cite figures that do not fully match. Mexico News Daily, citing CFE’s official bulletin, reported the project would avoid “over 93,000 tonnes” of CO2 emissions annually. Mexico Business News, in a separate report, cited a figure of “approximately 94,389t” of CO2 avoided per year. Both figures were described as equivalent to removing approximately 31,463 vehicles from circulation, a matching detail across both reports.
| Component | Figure |
|---|---|
| Photovoltaic plant | 72 MW |
| Battery storage (BESS) | 20 MW |
| Electrolyzers | 20 MW |
| Fuel cells | 6 MW |
| Households served | ~40,000 |
| Water supplied to population | 120 m3 |
| Diesel/fuel oil avoided annually | ~23,000 m3 |
| CO2 avoided annually | over 93,000t (MND) / ~94,389t (MBN) |
| Vehicles-off-road equivalent | 31,463 |
| Location | Mulegé, Baja California Sur, Mexico |
First state-led green hydrogen power project
Mexico Business News described Proyecto Oasis BCS as marking “Mexico’s first operational deployment of green hydrogen for utility-scale electricity generation.” Mexico News Daily similarly reported that, if completed, it would be “the first green hydrogen power generation project operated by the CFE.”
Calleja said in June 2026: “At CFE, we are working to provide a solution that enables the utilization of that region’s natural resources and advances us toward a clean, efficient, and self-sufficient supply,” according to Mexico News Daily.
CFE’s push into green hydrogen has stalled before. Mexico Business News reported that a green hydrogen pilot the utility had planned for its Rafael Galván Maldonado photovoltaic plant in Puerto Peñasco, Sonora, in 2023 did not proceed, in the absence of a clear regulatory framework for green hydrogen production, commercialization and export. Israel Hurtado, president of the Asociación Mexicana de Hidrógeno y Transformación Energética, told Mexico Business News that green hydrogen is a viable option for isolated systems such as Baja California Sur’s, but said the project’s operational performance will need to be evaluated before the model is replicated in comparable regions, such as the Yucatán Peninsula. UNAM researcher Luca Ferrari was cited by the same outlet noting that low energy efficiency, high costs and the corrosive nature of hydrogen remain technical obstacles for the technology.
Proyecto Oasis BCS was presented alongside a second CFE project, the phased expansion of the Rafael Galván Maldonado photovoltaic plant in Puerto Peñasco, Sonora, to a total of 1,000 MW. Both projects were framed by CFE within Mexico’s binding target, set by the national energy ministry SENER, of reaching 38% renewable electricity generation by 2030.
Elsewhere in the sector, China completed its largest integrated solar-hydrogen-storage project, pairing solar generation with hydrogen production and storage at scale. Isolated and off-grid regions have separately been a focus for combined generation-storage systems; see winssolutions.org’s overview of microgrids as a solution for reliable, localized energy.
About CFE (Comisión Federal de Electricidad)
CFE is Mexico’s state-owned electric utility, founded in 1937 under President Lázaro Cárdenas to extend electricity generation, transmission and distribution across the country. It remains the dominant supplier of electricity in Mexico and operates the National Interconnected System that covers most of the country, with the notable exception of Baja California Sur.
In 2026, CFE has announced or completed several large generation projects, including the 499 MW Elvia Carrillo Puerto plant in Mérida, which entered commercial operation on May 12, and the 745 MW González Ortega plant in Mexicali, inaugurated on June 21, according to Mexico Business News. The utility’s earlier attempt at a green hydrogen pilot at Puerto Peñasco, Sonora, planned for 2023, did not proceed for lack of a regulatory framework. Proyecto Oasis BCS represents CFE’s renewed attempt to bring green hydrogen into utility-scale electricity generation, this time for a region that cannot draw on backup power from the rest of the national grid.
Sources: Mexico News Daily; Mexico Business News; Mexico Business News
Featured image: photo by Deane Bayas on Pexels (free Pexels license).
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I specialize in sustainability education, curriculum co-creation, and early-stage project strategy. At WINSS, I craft articles on sustainability, transformative AI, and related topics. When I’m not writing, you’ll find me chasing the perfect sushi roll, exploring cities around the globe, or unwinding with my dog Puffy — the world’s most loyal sidekick.
