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(Bloomberg) — The risk of blackouts will increase for most of North America over the coming decade due to surging electricity demand and the closing of fossil-fuel power plants, according to a report by a grid reliability regulator. 

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Solar and battery projects aren’t connecting to the grid fast enough to replace retiring coal and natural gas generators, according to an annual assessment released by the North American Electric Reliability Corporation. In addition, the new power resources are more variable and weather-dependent than the ones they are replacing, the report said. 

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The report underscores the challenges utilities and grid operators face as demand is forecast to rise the most in decades, driven by artificial intelligence and the electrification of the economy. At the same time, environmental concerns have prompted the shutdown of fossil-fuel plants that have traditionally made up the backbone of the US power system. While those resources are being replaced by solar, wind and batteries, the new projects can face delays plugging into the grid. 

“Over half of North America is at risk of supply shortages in the assessment horizon,” Mark Olson, manager of reliability assessments for NERC, said in a media briefing Tuesday. “All areas are seeing demand growth in the next few years and by and large most areas are seeing accelerating growth compared to prior years.”

Risks are expected to become particularly acute for the Midcontinent Independent System Operator, which covers a large portion of the US Midwest and was designated in the report as “high risk” for potential electricity shortfalls over the next five years under under normal peak conditions. 

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Large swaths of the the US and Canada face shortages in extreme winter storms or summer heat, according to the report. And demand growth in winter is outpacing summer when there is less solar power, creating a greater chance of natural gas disruptions. 

Fossil fuel plants continue to shut down at an accelerated pace. Over the next decade, 78 gigawatts of generation will shut down and that number could rise to as much as 115 gigawatts for those that are planning to but have not yet begun the formal deactivation process, according to the report. One gigawatt is typically enough to power about 750,000 US homes. 

“The size and speed with which data centers (including crypto and AI) can be constructed and connect to the grid presents unique challenges for demand forecasting and planning for system behavior,” NERC said in its assessment. 

(Updates with new context and comments starting in the fourth paragraph.)

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