Dive Brief:

Corporations have purchased 7.2 GW of clean energy in 2018, already beating last year's record by almost 2 GW, according to a Bloomberg’s NEF (BNEF) report released Friday.

Currently, 140 companies have signed 100% renewables pledges and, in order to meet their targets by 2030, BNEF estimates they will need to purchase another 197 TWh of clean energy, which will lead to an additional 100 GW of global solar and wind capacity.

Purchases are estimated to reach 10 GW by the end of the year, Kyle Harrison, a corporate energy procurement analyst at Bloomberg, told Utility Dive. In the two days between the report's cutoff date and its release, he said around 400 MW of additional deals were signed, nearing the 8 GW range.

Dive Insight:

As renewables prices continue to drop, more and more companies are signing renewable energy commitments, further motivating other companies to join the market as well, according to Harrison.

In 2010, Google completed a 20-year Power Purchase Agreement (PPA), which Harrison says "created the blueprint" for virtual corporate PPAs. These agreements picked up more steam around 2015, when renewables became cost competitive in certain wholesale markets.

Since then, the spike has continued and the market is expected to keep developing. Facebook was the largest corporate buyer this year, purchasing an additional 1.2 GW of clean energy, bringing its total renewable capacity close to 2 GW, which makes them the second largest corporate buyer of renewables in the world, according to Harrison.

"The trend of more companies making commitments and then also smaller companies pooling their demand together to take advantage of the economies of scale of a large solar wind project... are two huge drivers that have really kept momentum going in this space," said Harrison of the growth.

New industries entering the market as well as an increase in green tariffs, which utilities use to work with corporate customers in regulated markets, constitute other factors for this year's surge, according to the BNEF report.

Wind continues to dominate corporate purchases in the U.S. and in Europe because of its large capacity as well as record-breaking prices. The report projects wind and solar to make up 50% of total electricity globally by 2050.