Guide to ERCOT RTC+B

On December 5, 2025, ERCOT is implementing a foundational market change. The grid operator will begin co-optimizing energy and Ancillary Services (AS) in the Real-Time Market (RTM). This shift is called Real-Time Co-Optimizations plus Batteries (RTC+B).  

Here is what you need to know.

To-date, ERCOT has procured all Ancillary Services in the Day-Ahead Market (DAM). This has led to inefficiencies and reliability concerns for ERCOT, as well as lock-in for operators. System conditions change between the Day-Ahead market run and operating interval and shortfalls can emerge for specific grid services. That mismatch has forced ERCOT to lean on band-aid fixes like the Supplemental Ancillary Services Market (SASM) and Reliability Unit Commitment for fallback capacity, driving up costs and increasing volatility.

Under RTC+B, energy and AS will be dispatched in conjunction in real-time. That means ERCOT’s real-time dispatch engine (SCED) will look at your full capability every 5 minutes and decide whether it’s more valuable for you to provide energy or an Ancillary Service based on a combination of your bids/offers and observable constraints such as SOC limits, network congestion and AS demand curves. Instead of being locked into a service you committed to yesterday in the DAM, all DA commitments (energy and AS) will be purely financial, and operators can choose to update their plan in RT based on grid conditions and updated forecasts.

For batteries, this is a big shift:

• More flexibility: Instead of being locked into a DAM AS award, your battery can swing between energy and AS every 5 minutes.
• Fewer stranded MWs: If you offered 20 MW to RRS in DAM, historically, those MWs were “set aside” and unavailable to SCED. With RTC+B, the system still sees your entire operating range and allocates those MWs dynamically.
• Tighter alignment with conditions: Real-Time awards will reflect what’s actually happening on the grid — load, renewables, congestion — rather than forecasts made a day in advance.
• Storage as a single resource: ERCOT will now view storage assets as one single resource rather than as load for charging and generation for discharging.

In short, ERCOT RTC+B lets you optimize across all your bids every 5 minutes in real time. Does this make the optimization puzzle more complex? Absolutely. But does it also provide opportunity for energy storage operators to improve revenue outcomes? If done well.

ERCOT is hoping this shift will lead to:

1. Improved efficiency: RT dispatch will unlock better resource use and reduce system costs – with potential savings estimates of about $1.6 billion annually.
2. Price convergence: RT prices will better reflect real-time system needs, narrowing gaps between DA and RT markets.
3. Greater reliability: By dispatching AS more flexibly, ERCOT aims to reduce manual interventions, avoid infeasible or insufficient AS procurements, and eliminate less efficient supplemental markets.
4. Better congestion management: A broader toolkit of resources, including batteries, can help relieve transmission congestion more efficiently.

The changes of RTC+B provide both a great opportunity and a new challenge for storage assets. On one hand, you’ll have more flexibility than ever to earn revenue in RTM, and won’t be as inhibited by AS obligations. On the other, the operational bar is rising — agility, automation, and smarter bidding will be critical to keeping pace with the market, and complying with the new rules.

Opportunities:

• Higher RTM Revenue potential: With strong forecasting and optimization you will be able to capture the highest priced products by interval, without being inhibited by DAM obligations. 
• Total available capacity seen by SCED: The switch from “AS Responsibility” to “AS Capability” means SCED will be able to see your full operating range going into each interval. Previously, capacity obligated to DAM AS obligations was sectioned off (Ex: a 100 MW battery that bids 20 MW into RRS is no longer capped at 80 MW for RT energy).
• Bid flexibility: Storage gets up to 10 bid pairs per interval for energy and 5 for AS, allowing you to express nuanced views of value and capture the best mix of products.

Risks:

There is no question that company risk policies will need to evolve with RTC+B. Assets can now take financial positions in five different AS products in the DAM, in addition to DA energy. It will be important to have a perspective on how much you are willing to take on in the DAM, if you want to cover (or have the option of covering) all DA obligations, and more.

• Lower arbitrage opportunity: Greater efficiency in RT dispatch may compress the DA/RT volatility that many storage assets rely on today.
• Stricter performance standards: If your ESR deviates from a set point beyond the greater of 3% of the average set point or 3 MW, you’ll face penalties. 
• State of charge uncertainty: While operators will have more control over SoC given the newfound ability to adjust AS bids in real-time, RT redispatch and new duration requirements makes SoC more variable and therefore the optimization becomes more complex. Operators without sophisticated SoC management risk being out of position.
• Increased operational complexity: Though this is an opportunity for those with the right tools, operators with legacy software or relying on manual bidding strategies will miss out on the majority of revenue opportunities given increased velocity.
• Inferior tools raise risk: Without an optimizer that can constantly rebalance bids and SoC in real time, operators will face higher AS imbalance exposure (rather than Failure to Provide and associated penalty risk previously) and leave revenue on the table.

There are a number of other nuanced rules around how and when bids are submitted, Updated Desired Set Points (UDSPs), and more that will be important for executing optimization seamlessly. Tyba has been programming these all into our optimizer so compliance is at the core, and optimization strategy can flourish. 

With dispatch shifting every 5 minutes across energy and multiple AS products, the “best” choice is constantly changing. It’s nearly impossible for a human trader alone — or inferior/legacy software — to evaluate all the variables (price curves, SoC, penalties, transmission congestion, opportunity costs) in each interval. An advanced optimizer, like Tyba, with automatic real-time bidding and dispatch capabilities is essential to capture this value and avoid costly missteps.

RTC+B will fundamentally change how batteries participate in ERCOT – at least for storage assets that hope to perform well. Success will depend on evolved forecasting models that train on the new pricing dynamics, tighter asset integrations, and fast, agile real-time optimization. Operators who approach it as business-as-usual will quickly fall behind.

This is because the optimization problem has gotten much more complicated.

Essentially, our AS offers are now real-time quantities optimized on a sliding horizon basis, rather than fixed obligations cleared in the DAM. This means we can no longer optimize energy bids with an AS capacity obligation operating as a fixed input.

Tyba is currently testing our optimizer on the new problem, honing our approach so the platform is able to maximize revenue under RTC+B. We are investigating everything from the potential arbitrage opportunities in AS, to the best way to forecast and optimize across all energy and AS products available in RT, to getting solve times for this more complex optimization problem fast enough so they can submit ahead of each 5-minute interval. 

While no one can perfectly predict how market dynamics will land, an agile optimizer that can react and re-optimize in real-time will be nonnegotiable. The problem is more complex, changing more rapidly, and the revenue opportunities will be achievable only by those able to co-optimize quickly and effectively.