In the current political and economic environment, fossil fuel investments are looking much more risky than at any other time in history.
There are at least three good reasons why. First, as climate change worsens, policies are likely to be put in place to constrain emissions. We could see this begin domestically with strict enforcement of the Clean Air Act. Second, whether or not large-scale coal retirements happen, the capacity market isn’t particularly friendly to new fossil fuel generation. In fact, the U.S. has a surplus of generation and dramatically underutilizes existing capacity. And for the first time, fossil fuels have a host of increasingly competitive alternative investments that include efficiency, demand response, solar, and wind.