Paramount Global’s Emissions Reduction Strategy: VPPAs and On-Site Solar

Companies are transitioning to renewable energy to limit global warming well below 2°C, in accordance with the Paris Agreement. However, on-site renewable energy generation and ownership can be extremely challenging due to complex site ownership structures, facility capabilities, and capital investments. Many companies are turning to power purchase agreements (PPAs) and virtual power purchase agreements (VPPAs) to meet net zero goals. This project develops a corporate renewable energy procurement strategy to help Paramount Global, a major media and entertainment company, abate its Scope 2 emissions. In this project, we: 1) Analyze Paramount’s current energy consumption and Scope 2 emissions to identify  facilities and regions in the U.S. to prioritize renewable energy procurement, 2) Model Scope 2 emissions reductions using on-site renewable energy and VPPAs to evaluate the potential costs, benefits, and risks of renewable energy procurement. Provide a procurement recommendation that reduces Paramount’s Scope 2 emissions and increases total renewable energy production, and 3) Provide implementation information, including details on VPPA financial modeling services and solar developers. Create reproducible and accessible code for VPPA modeling to allow Paramount to test VPPA viability under changing market conditions. Our model found that Paramount’s abatement potential with on-site solar is about 1%, while VPPs can abate about 99% of its emissions. We recommend that Paramount pursue on-site solar to have direct control over energy production and predictable energy costs. Further, we recommend that Paramount prioritizes the lowest-cost VPPA options first and diversify its VPPA types and generator locations.

Acknowledgements

Bren School: Ranjit Deshmukh, Assistant Professor; Roland Geyer, Professor; Arturo Keller, Professor; Matthew Potoski, Professor 

Paramount Global: Kevin Brown, Manager, Strategic Sourcing; Jack Neber, Director, Strategic Sourcing;
Sarah Volkman, Senior Manager, ESG & Sustainability

Matt Panopio, Technical Product Manager, Energy & Climate at Amazon