Royal Caribbean Announces First-of-Its-Kind Renewable Energy Transaction with Southern Power
On October 11, 2018, Royal Caribbean Cruises, a leading global cruise line based in Miami, Florida, announced that it has entered into an agreement with Southern Power, a wholesale energy provider, to support the development of the planned 200-megawatt Reading Wind Facility in Reading, Kansas. The Reading facility will include 62 wind turbines manufactured by Siemens Gamesa Renewable Energy to generate approximately 760,000-megawatt hours per year over a 12-year purchasing agreement. The project, which was initially sourced by Southern Power's joint development partner RES America Developments, is expected to break ground in 2019 and will be completed in 2020. According to Seatrade Cruise News, the Reading Wind Facility will produce "enough clean energy to offset about 512,000 tons of CO2 a year—or 10 to 12 percent of [Royal Caribbean's] annual carbon emissions" as of 2020. Wilson Sonsini Goodrich & Rosati represented Royal Caribbean in the transaction.
The agreement is classified as a Virtual Power Purchase agreement, pursuant to which Royal Caribbean acquires all carbon offsets generated by the Reading Wind Facility and also provides a floor price for electricity sales by the Reading Wind Facility to the wholesale market. The floor price gives Southern Power the economic certainty it needs to finance and construct the Reading Wind Facility, and the carbon offsets help Royal Caribbean achieve its global carbon emissions goals. The Reading Wind Facility will be Southern Power's 11th wind facility and the first time Southern Power has certified a renewable energy project as a source of carbon offsets. The agreement was the first such transaction for Royal Caribbean.
The transaction is another example of the rapidly growing interest among American and global corporations in supporting renewable energy projects and offsetting their carbon footprints. In just the past few years WSGR has represented energy developers and corporate purchasers in an aggregate of over 2000 megawatts of such transactions.
For more information, please see Royal Caribbean's press release.