Jane Dodds says Mid Wales is being held back because of a lack of infrastructure and power generation.
The Mid and West Wales MS said at the Senedd that this is “one of the massive challenges we face in Mid Wales”.
She said it means, literally, that businesses are lacking the power and the energy to grow.
Ms Dodds said: “That has an effect on them as businesses, but also on the opportunity to employ people.
“Companies don’t move in because of that particular challenge, and projects don’t develop either.
“I was pleased to read in the ‘Future Energy Grids for Wales’ report that constructing a north-south transition link would support distribution reinforcement in Mid Wales.
“We should look at all the options before us, including the option of building a more local distributed power grid which would mean that local businesses could get the energy they need.
“What we need is local power generation in Mid Wales to support projects.”