Post: RTC+B is coming to ERCOT

RTC+B is coming to ERCOT

In December 2025, ERCOT’s Real-Time Co-Optimization plus Batteries (RTC+B), is set to go live. This change will mean batteries will have more flexibility to move between energy and ancillary service positions in real-time; but will also face higher complexity.

What is RTC+B?

Historically, ERCOT has procured all ancillary services in the day-ahead market. As system conditions change between the day-ahead market and operating interval, shortfalls can emerge for specific grid services. From December 2025 ancillary services will be procured in the real-time market alongside energy. This shift is called Real-Time Co-Optimizations plus Batteries (RTC+B). 

Security-Constrained Economic Dispatch (SCED) will co-optimize both, ensuring the lowest-cost solution every 5 minutes based on a combination of bids/offers and observable constraints such as the power storage State if Charge (SoC) limits, transmission constraints, energy and ancillary service supply curves and demand curves.

Under the current ERCOT regime, ERCOT calculates a scarcity price adder for energy called the ORDC (Operating Reserve Demand Curve) adder. Online generators that are not actively dispatched, or dispatched at partial capacity, would be compensated based on the ORDC adder only for being ready to be dispatched. Under the RTC+B regime, the ORDC adder to the energy prices is removed, and replaced by adders to real time ancillary service prices, known as ASDC (Ancillary Service Demand Curves). This change eliminates the added revenue of stand-by generators during the scarcity events. Generators will only get paid if they are providing a service to the grid (ancillary services or energy), and not for standing by.

RTC+B also introduces SoC into ERCOT’s market-clearing processes. This will impact how SCED allocates base points and strengthen grid reliability.

Opportunities

The changes of RTC+B provide an opportunity and a new challenge for storage assets.

On one hand, batteries have more flexibility than ever to earn revenue in real-time market without being inhibited by ancillary service obligations agreed day-ahead. But agility, automation, and smarter bidding will be critical to keeping pace with the market, and complying with the new rules.

One of the most significant advantages lies in the increased revenue opportunity within the real-time market. With enhanced forecasting, analytics, and optimization capabilities. Another benefit comes from the improved visibility of available capacity to the SCED.

Under the previous market design, any capacity committed to ancillary services in the day-ahead market was effectively removed from real-time consideration. For example, a 100MW battery that offered 20MW into Responsive Reserve Service (RRS) would only be able to participate in real-time energy markets with the remaining 80MW. Under the new model, SCED can now see and utilize the full operational range of the resource.

The expanded bidding structure is also a major advantage for flexible assets. Energy storage resources now have the ability to submit up to ten bid pairs per interval for energy and five for ancillary services. This increased granularity enables a far more nuanced expression of value and market position.

Risks

Alongside these opportunities, the new framework introduces a set of operational and financial challenges that require careful management.

Operational complexity overall is expected to increase significantly. The pace of decision-making required, driven by dispatch intervals across both energy and multiple ancillary service products, makes manual trading or reliance on legacy systems impractical. Operators using static or outdated tools will likely miss out on a substantial portion of the available revenue potential.

Under RTC+B, assets can take positions across five different ancillary service products in addition to day-ahead energy, which increases both potential reward and risk. It is therefore crucial for participants to define clear internal policies on acceptable levels of exposure within the day-ahead market while maintaining the flexibility to meet all obligations.

Market efficiency improvements in real-time dispatch may also lead to reduced arbitrage opportunities, as the volatility between the day-ahead and real-time markets narrows. For storage operators that have historically relied on this volatility, this could compress traditional revenue streams.

Performance standards are also more stringent. If a battery deviates from its instructed set point by more than the greater of 3% of the average set point or 3MW, it will incur penalties. Although operators now have greater flexibility to adjust ancillary service bids in real time, new duration requirements and redispatch events make SoC management more dynamic. Without sophisticated optimization tools, operators’ risk being caught out of position or unable to meet market obligations efficiently.

Conclusion

RTC+B ultimately introduces more flexibility, but this is coupled with more complexity. The shift to RTC+B creates a landscape in which the “best” decision changes every few minutes. The interplay between price curves, SoC, penalties, congestion, and opportunity costs is complex for human traders or basic software to manage effectively.

GridBeyond’s platform is built for this reality. Through automation, advanced analytics, and continuous optimization, it enables participants not only to stay compliant and mitigate risk but also to thrive in this faster, more dynamic market environment.

Academy | Brochure | insights | White paper

ERCOT and CAISO market trends in 2024 and successful bid optimization

In this paper we examine market trends in ERCOT and CAISO impacting power storage and what makes a successful bid optimization strategy.

Learn more