The reliability of Australia's energy supply will be under significant risk unless there is urgent investment in new sources of electricity and transmission, the national energy market regulator has warned.
The latest Electricity Statement of Opportunities (ESOO), released on Thursday, provides an outlook for the National Electricity Market in the coming decade.
It was not a forecast but rather a guide to inform planning and policy decisions, Australian Energy Market Operator chief executive Daniel Westerman said.
"It's a signal to investors that the viability gaps do exist and points investors to where and when they need to be filled," he said.
About 62 per cent of Australia's coal power stations are expected to be retired by 2023, with unplanned outages from the ageing fleet also posing risks to grid stability.
Planned generation, storage and transmission supported by government programs "must be delivered urgently" because any delay would likely put reliability at risk over the coming decade, the statement said.
Reliability risks are forecast to exceed standards in several states in coming years, and as soon as the coming summer in Victoria and South Australia.
The hotter and drier conditions would likely increase peak demand for electricity, Mr Westerman said.
"When there are multiple days of very hot weather, low wind and unplanned outages from coal-fired power stations, that's when we can get into tight situations between supply and demand," he said.
"Before this summer, we are connecting new renewable projects and storage projects and importantly a new gas power station.
"We're working towards connecting with the new generation that will replace our old coal-fired power stations. That is our best way forward."
Director at think tank Climate Energy Finance, Tim Buckley, said urgent action was needed from state and federal governments.
"Accelerating the pace of energy transformation and transitioning our grid is critical to ensuring reliable energy supply and solving the current energy crisis," he said.
Energy Minister Chris Bowen said the past five ESOO reports under the coalition government flagged supply concerns, heightened risks from coal outages and the need to incentivise continued supply.
"Over the last decade, four gigawatts of dispatchable energy left the national energy market and only one gigawatt came on. That means the system is very tight," he said.
"We have a lot of catching up to do but that catching up has begun and will continue to."
Asked if the former coalition government should take any responsibility for the concerning state of the energy system, Liberal senator James Paterson said there had been "record investment" in renewables.
As a senator for Victoria, he was unsurprised the state was facing the possibility of blackouts under the Andrews government's energy policies.
"When you've got a state government here in Victoria which is putting extra taxes on coal-fired power generation, that has led to the inevitable circumstances we're seeing right now," he said.
But Victorian Premier Daniel Andrews said he would not apologise for pushing forward with renewable energy projects.
"You can cling to the past and pretend that it's a fossil fuel future or you can work really hard every single day to make sure that we've got more renewable energy," he said.
"We choose to work hard every day and that's exactly what we'll keep on doing."
The Australian Petroleum Production and Exploration Association said the answer to the looming energy crisis was gas.
"Gas is the safety net we need as we transform our electricity system," chief executive Samantha McCulloch said.
"Governments must start listening to the repeated warnings from independent authorities of the need for new gas supply."