ERCOT RTC+B: What’s Changing

On December 5, 2025, ERCOT will go live with one of the biggest updates to its market in years: Real-Time Co-Optimization plus Battery Integration, or RTC+B. This redesign directly addresses challenges that have been building as renewable generation grows and battery storage becomes more central to grid operations.

RTC+B changes how energy and ancillary services are cleared, how fast-response resources like batteries are dispatched, and how reliability is managed in real time. It also introduces a new Virtual Ancillary Services (VAS) market—an important shift in how ERCOT procures and prices ancillary services, moving away from rigid, physical day-ahead commitments to a more dynamic, financially-settled product.

Together, RTC+B and VAS represent a major shift in ERCOT’s approach to grid operations, designed to support a more flexible, storage-rich system.

What is RTC+B, Exactly?

RTC+B is built around the concept of Real-Time Co-Optimization (RTC)—a market framework that simultaneously optimizes energy dispatch, ancillary service needs, transmission constraints, and opportunity costs every five minutes. Unlike the current system, where energy and ancillary services are cleared separately, RTC evaluates them together in a unified model. That means more efficient prices and a more reliable dispatch process.

The “+B” refers to the full integration of battery energy storage systems (BESS) into this co-optimized engine. Batteries bring fast ramping, bi-directional power flow, and state-of-charge (SOC) flexibility. RTC+B incorporates all of those characteristics directly into dispatch decisions and price formation.

This new model is designed to unlock the full potential of batteries while ensuring that price signals reflect real-time grid needs more accurately.

How the Current ERCOT Market Works (Pre-RTC)

Under the existing setup, ERCOT operates an energy-only market where real-time energy clears every five minutes through SCED (Security Constrained Economic Dispatch), and ancillary services—like Regulation Up, Regulation Down, Responsive Reserve Service (RRS), Non-Spin, and ECRS—are mostly procured in the day-ahead market. Real-time adjustments to these services are limited and approximate.

This structure creates several key challenges:

Energy and ancillary services are cleared separately, so ERCOT can’t evaluate the true marginal value of energy vs. reserves for each resource. This means a MW might be committed to reserves when it would be more valuable providing energy—or vice versa.

Opportunity cost pricing is limited. Since markets are not integrated, reserve prices often don’t reflect the true cost of foregone energy. Batteries might be dispatched for regulation even when arbitrage would be more profitable, and thermal units might get reserve awards during energy scarcity.

ERCOT relies heavily on manual reliability actions, like Reliability Unit Commitments (RUC), Supplemental Ancillary Service Market (SASM), and operator deployments. These interventions can distort market outcomes and increase uplift costs.

Battery constraints aren’t fully modeled. The current system doesn’t optimize battery charging, doesn’t factor in state of charge when awarding reserves, and often forces batteries to choose between arbitrage and ancillary services—reducing efficiency and revenue potential.

How the Market Changes Under RTC+B

RTC+B creates a fully co-optimized market engine that re-evaluates all decisions—energy dispatch, reserves, SOC behavior, and more—every five minutes. This leads to several key improvements:

1. Integrated Clearing for Energy and Ancillary Services

Rather than running energy and reserves in parallel, RTC+B evaluates every MW for energy, upward and downward reserves, fast frequency response, and transmission deliverability in a single model. This ensures ERCOT selects the most efficient mix of services from available resources.

2. Accurate Pricing Based on Opportunity Cost

With energy and reserves clearing together, prices reflect true marginal tradeoffs. Reserve prices account for the energy a resource gives up, and batteries receive more accurate compensation based on system needs. Price signals become sharper and more reliable.

3. SOC-Aware Battery Dispatch

Batteries are now dispatched with full awareness of SOC, ramp rates, efficiency losses, and charge/discharge limits. This allows:

Charging when the system needs more future reserves

Discharging when real-time scarcity arises

SOC to stay aligned with expected grid conditions

It’s a smarter, more responsive way to use storage—aligned with both economics and reliability.

4. Fewer Manual Interventions

By capturing real-time constraints and needs in the market logic itself, RTC+B reduces the need for RUCs, operator deployments, and SASM (which will be retired). This lowers uplift, improves transparency, and creates a more predictable market for participants.

Introducing Virtual Ancillary Services (VAS)

Alongside RTC+B, ERCOT is also introducing a new Virtual Ancillary Services (VAS) market. This is a financial product that replaces physical day-ahead ancillary service commitments with more flexible bidding and clearing.

Under the current system:

Ancillary services are procured day-ahead, by the hour

Only physical resources can participate

Day-ahead awards often don’t match real-time system needs

ERCOT must manually adjust reserves, leading to price distortions

VAS changes that by allowing market participants to offer ancillary capacity financially, improving price discovery and aligning procurement with real-time conditions. This should reduce over- or under-procurement and allow a broader range of players—including those using virtual strategies—to contribute to reliability.

The Bottom Line: A Market Built for Renewables and Storage

ERCOT’s transition to RTC+B represents a long-overdue shift from a market designed around thermal generation to one that embraces the flexibility of modern assets. For renewable energy producers, batteries, and large flexible loads, it opens up new opportunities for revenue and participation—but also requires a fresh look at bidding, dispatch strategy, and risk management.

Compared to the current model, RTC+B offers:

More accurate, transparent price signals

Improved alignment between energy and ancillary markets

Better battery integration with real-time dispatch logic

Reduced reliance on manual ERCOT actions

A more dynamic, financially settled ancillary market

Get Ready for RTC+B with CWP Energy Solutions

Whether you operate wind, solar, battery storage, or a large flexible load like a data center or industrial site, CWP Energy Solutions can help you prepare for this transition.

We offer support in:

Financial optimization (day-ahead and real-time)

Ancillary service strategy under RTC+B

Battery dispatch modeling with SOC integration

Virtual bidding and VAS participation

Risk management and PnL improvement

At CWP Energy Solutions, we closely follow these changes in ERCOT and support market participants as they adjust their strategies for RTC+B and the new VAS framework. If you’d like to discuss how this transition may affect your assets or operations, you can reach us at solutions@cwpenergy.com.