Large parts of the United States and some areas in Canada, home to around 165 million people, could face energy shortfalls during periods of extreme heat this summer, a group that sets reliability standards for North American electric grids warned.

In its summer outlook released on Wednesday, the North American Electric Reliability Corp (NERC) put the U.S. West, Midwest, Texas, Southeast, and New England, along with Ontario in Canada, at elevated risk of "insufficient operating reserves in above-normal conditions."

NERC said extreme heat events put the U.S. West at risk of an energy supply shortfall as it relies on regional energy transfers to meet demand at peak or when solar output is diminished.

"Wildfire risks to the transmission network, which often accompany these wide-area heat events, can limit electricity transfers and result in localized load shedding," NERC said.

In the U.S. Midwest, NERC said the Midcontinent ISO could face challenges in meeting above-normal peak demand if wind generator energy output is lower than expected.

In Texas, NERC said resources are adequate for peak demand of the average summer as the state has added over 4 gigawatt of new solar capacity to its grid since last year.

But the group warned that "dispatchable generation may not be sufficient to meet reserves during an extreme heat-wave that is accompanied by low winds."

NERC said New England and Ontario may need to rely on non-firm imports during extreme demand or low resource conditions, while the Southeast is vulnerable due to flat growth in generating resources.

Limited operation of coal-fired power plants due to new environmental regulations, low water levels on major reservoirs, unexpected tripping of wind and solar resources, and curtailed transfers to areas in need also posed reliability concerns, NERC added.

NERC has become more assertive in warning about reliability concerns in recent years after power grid operators were forced to impose rotating outages in California in August 2020 and in Texas in February 2021.

(Reporting by Deep Vakil in Bengaluru, editing by Deepa Babington)