Royal Caribbean Cruises Ltd. aims to bolster its image as a
good corporate citizen via a partnership with a utility company that produces
In the deal, RCCL will provide a financial guarantee to the
developer of the Reading Wind Facility, a wind turbine electric plant in Kansas.
The renewable energy that the facility produces is intended to offset up to 12%
of the carbon emissions from RCCL's ships.
The project near Emporia, Kansas, will be developed by
Southern Power, which will sell the electricity into the grid for use by retail
Royal Caribbean's role will be to provide an upfront
guarantee that the power will be sold at a set price through a financial
instrument called a Power Purchase Agreement (PPA). The price (which was not
disclosed) provides certainty that the project will happen.
The scheme has gained popularity as big corporations seek to
offset the greenhouse gas emissions that can be attributed to their goods or
services. Other companies that have environmental PPAs with renewable-energy
producers include Microsoft, General Motors, Google and General Mills.
The PPAs allow the sponsor companies to claim credit for any
RCCL claims to be the first travel company in a Power
"This agreement complements our longstanding strategic
initiatives to reduce the company's emissions and become a more sustainable
operator," RCCL chairman Richard Fain said.
RCCL ships emit more than 4.2 million tons of greenhouse
gases a year, mostly the combustion by-product carbon dioxide that many
scientists say traps heat in the atmosphere, thereby raising global
To counter the impact, RCCL plans to sponsor the Reading
Wind Facility, which would use 62 wind turbines with blades up to 230 feet long
to spin generators that will produce 760,000 megawatt hours of electricity per
The offset is equivalent to the CO2 emissions from energy
used by 55,400 average U.S. homes, RCCL said.
RCCL has a goal of reducing greenhouse emissions by 35% by
2020, according to its 2017 Sustainability Report.
"We are constantly looking for new ways to reduce our
environmental footprint, both in the short and long term, and thanks to our
partnership with Southern Power, this is the latest step in our journey,"
The Sustainability Report says propulsion accounts for 60%
of the energy RCCL ships consume. Ships also burn fuel to make electricity.
To date, RCCL's major greenhouse strategy has been to reduce
fuel consumption through a myriad of seagoing energy-saving initiatives. Fain
said those initiatives will continue, and that RCCL was on track to reach the
35% reduction without the wind farm agreement.
RCCL's 12-year agreement to buy electricity from Southern
Power would begin in 2020 with the start-up of the Reading plant and run
Although RCCL has a call center in Wichita, Kansas, Fain
said he doesn't expect it would use electricity from the wind farm.
He said that although no regulations yet require RCCL to
offset its carbon emissions, the company's constituencies are eager to see it
"We have a number of stakeholders," Fain said. "Our
guests expect us to meet our social responsibilities. Our employees expect us
to meet our social responsibilities. And if we do that, it will allow us to
attract the best employees. And if we attract the best employees, we will
produce the best product," Fain said.