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(Bloomberg) — Australia’s grid operator sees risks of energy shortfalls over the next 10 years as the nation retires 62% of the coal power fleet that still provides most of its electricity.

Reliability risks are seen in Victoria from this summer and in New South Wales from 2025-2026, the Australian Energy Market Operator said Thursday in its Electricity Statement of Opportunities report. Power demand is expected to continue growing along with the population and economy and it is critical that planned investments in transmission, generation and storage projects are “urgently delivered,” it said. 

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“While our central scenario shows increased reliability risk, it does not reflect the reliability potential from the 248 gigawatt pipeline of proposed generation and storage projects, actionable transmission projects and government energy programs underway,” AEMO Chief Executive Officer Daniel Westerman said. 

Utilities are rushing to shutter aging coal operations as they face increased competition from cheaper solar and wind generation and pressure from shareholders to speed up their transition. Investment in large-scale renewable energy projects jumped 145% in 2022 to about $5.9 billion, with around 5 gigawatts of solar and wind installed, according to BloombergNEF.

The coming southern hemisphere summer is likely to be hotter than in recent years, leading to increased electricity demand and “some risk,” the AEMO said. That has been tempered by an additional 3.4 gigawatts of new generation and storage capacity installed since the previous summer, it said.