Richard Fain has been chairman of Royal Caribbean Cruises Ltd. (RCCL) for 30 years. He drives a Tesla and has a 15-kilowatt wind turbine at his vacation home in North Carolina. He spoke with cruise editor Tom Stieghorst about RCCL's venture with Southern Power and RES America to build a wind farm in Kansas.
Q: Why is RCCL getting into the electricity business?
Richard Fain
A: It's unusual to create a structure like this to bring together different enterprises. We're not wind turbine experts by any stretch of the imagination, but we teamed up with RES America, which is expert in this kind of construction; and we're not energy experts, but we teamed up with Southern Power, and I think together we created something that was really quite special. This is an awful lot of renewable energy to be generated from the project, and that's really the answer. We're creating, effectively, a 200-megawatt project that will be generating enough renewable energy, with zero carbon, to power 60,000 homes. And that represents 10% to 12% of our energy needs in the next few years.
Q: Is any regulator requiring you to do this?
A: There's no regulation about how much renewable energy you need. We have done and continue to do everything that ingenuity and determination can figure out how to do to reduce our energy needs. We're quite proud in our industry of the relatively low amount of energy that we use to operate our ships. But you can only take that so far. So, a little bit like belts and suspenders, we'd like to reduce our carbon footprint. The two ways you can do that are reduce your energy consumption as much as possible, and generate as much of the energy that you do need to use in a renewable way. There's no regulation that actually deals with this, but climate change is one of the defining crises of our generation, and if we can help in that direction you know we feel we ought to do it.
Q: What is RCCL's role?
A: By providing a guarantee on the economics, that gives the project the financial wherewithal to raise money and build the project. We're essentially guaranteeing the economics of the project, and that enables it to get built.
Q: What will this cost RCCL?
A: Because the price of energy is so volatile, we don't know how much this will cost us. But we think it was the right thing to do.
Q: Could RCCL end up making money?
A: I don't think so. I can't say for certain.
Q: Could Royal Caribbean's Wichita call center get its power from the project?
A: I have no reason to believe that. These specific watts of electricity are going out to the grid, not to any one property.
Q: Does this deal imply that energy-saving measures on the ships are diminishing?
A: Absolutely not. As you know, it gets harder and harder. You hit all the easy ideas first. And there's no silver bullet. But, literally, I sat in back-to-back meetings, one about this and another about some new steps we're taking to reduce energy consumption on the ships. So they keep finding new ways to do it. I like the fact these things are going in parallel. You're reducing your consumption and generating the electricity you do consume in a more environmentally friendly way. So it's a two-track approach.
Q: Would you fall short of your 2020 goal of 35% reduction in carbon emissions without this agreement?
A: We intend to reach that goal without any reference to the offsets. And we will reach it.
Q: Economic theory says companies benefit society by maximizing profits to shareholders and by leaving the regulation of pollution to governments. What's your view?
A: I do think it's incumbent upon corporations to do their best for their shareholders. But I don't think that's an unbridled goal. Meeting our social responsibilities actually helps us in achieving our profit motives. We have a number of stakeholders. 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.