How to Cut Energy Costs and Create Efficiencies This Winter

There's an unpredictability of winter weather that makes this season especially interesting for meteorologists — but far less enjoyable for anyone who's experienced the shock of a significantly higher energy bill thanks to extreme weather events.

We asked Brent Rice, senior quantitative analyst and meteorologist at IGS, for his insights into what this winter might bring — and follow up with a strategic energy approach businesses should consider this season.

The Winter 2024 Outlook

"At IGS, I work with our Forecasting and Supply Analytics team, which helps customers make the energy decisions that help them most effectively reach their goals — whether those goals are to offset carbon emissions or spend less to run their business," Rice said. "In the winter, my role becomes especially critical, as the season's volatile weather can seriously impact on a business's bottom line."

So, what's in store for this winter?

Looking ahead to the colder months, there is some good news, Rice said: This winter is likely to be dominated by the effects of a powerful El Niño, meaning an above normal, drier season for much of the northern U.S., and a wetter-than-average winter for the Southeast. As of forecasting reports made in the fall, no area of the country is forecast to be colder than average this winter.

However, Rice can't say for certain that this winter won't bring with it any serious storms or extreme temperature dips, as predicting these weather events is a complicated process, and winter storms can't be forecast more than a week in advance.

Why Businesses Should Focus on Efficiency This Winter

With so much uncertainty in the winter, it's important that businesses take steps to protect themselves from the risk of a larger-than-normal energy bill. And, ultimately, there's one significant factor businesses can control: their efficiency efforts.

If energy savings is the goal, the most effective first step is to enhance efficiency anywhere it's possible — replacing outdated equipment, retrofitting facilities with LED lighting, installing occupancy sensors, and more. Like any strategic initiative, improving efficiency takes time, as well as input from a few key players within a business. Once there's a plan in place, these practices can almost immediately help lower consumption.

Step 1: Invite the right people to the conversation

It's important to gather the right internal team members: Organizations who successfully manage their efficiency efforts bring together members of their operations, maintenance, and finance and accounting teams. While operations and maintenance teams may have insight into energy usage, they're often not the people responsible for paying the energy bills. If possible, consulting with an outside expert in managing and analyzing energy data can be especially helpful for organizations with small teams and few internal resources.

Step 2: Establish a benchmark for energy usage

With an understanding of where operations are today, a business can determine when and how they're using energy, as well as the impact on energy costs. After an energy review with internal and external experts, a real-time monitoring program can be implemented to help identify opportunities for efficiency improvements, benchmark usage before improvements, and verify the impact from these improvements.

Step 3: Understand your organization's energy bills

About half of a company's energy bill is driven by their energy demand: the measurement of the largest interval of power used during the billing period. Consumption, meanwhile, is a measurement of the total quantity of power you used during the billing period. Energy-efficiency efforts help save organizations money by lowering the demand required to run a facility. In turn, being able to flex energy load through efficiency solutions is one of the simplest ways to reduce energy spend.

Reviewing a year’s worth of interval meter data is key toward identifying if the peak demand you’re being billed for happens often. If your organization's peak demand is infrequent, you can work with your operations and maintenance teams to determine which processes are causing the demand.

As more organizations consider electrification efforts in an effort to reduce their carbon impact, it's important energy decision-makers don't lose sight of the critical role of overall energy-efficiency efforts. While electrification upgrades are often more efficient and can reduce overall energy demand for consumers, an increasingly volatile energy market means it's as important as ever to have an energy strategy in place that can help create efficiencies while protecting your business from market risk.

Remember: Finding ways to reduce energy consumption should be a business's top priority. Regardless of the weather winter brings, these efficiency efforts can go a long way toward helping an organization lower their overall energy spend. And as volatility continues in the energy market, controlling the things you can is more important than ever.

For more guidance on how to best control your energy costs, contact your IGS Energy rep today.