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Energy & Utilities

Preparing for ERCOT’s RTC+B market changes: What it means for energy and ancillary services

04/08/2025

by Jay Jayasuriya

The Texas power market is evolving, and with ERCOT’s Real-Time Co-optimization plus Batteries (RTC+B) initiative going live in December 2025, big changes are coming. These changes promise greater efficiency, improved reliability, and better integration of battery storage, but they also introduce new complexities in bidding, scheduling, compliance, and technology infrastructure.

For market participants—generators, energy traders, utilities, and battery storage operators—this isn’t just a simple tweak to the market. It’s a fundamental shift in how energy and ancillary services are dispatched and settled. Those who prepare early and adapt strategically will be in the best position to stay competitive and avoid costly missteps.

Let’s break it down.

Why RTC+B Matters for Energy & Ancillary Services

At its core, RTC+B brings real-time co-optimization of energy and ancillary services to the ERCOT market. Right now, ERCOT procures ancillary services in the Day-Ahead Market (DAM) and doesn’t dynamically adjust them throughout the day. That’s about to change.

With RTC+B, the market will optimize both energy and ancillary services simultaneously in real time, which means:

• More efficient resource dispatch, reducing overall system costs
• Dynamically reallocated ancillary services, meaning they won’t be locked in from the day before
• Real-time dispatch decisions informed by the state-of-charge (SOC), meaning battery storage operators must adjust their strategies.

Sounds great in theory, right? But what does this actually mean for market participants?

Impacts on Market Participants

Scheduling and bidding are more complex.

• Day-Ahead Market (DAM) strategies may need an overhaul. Since ancillary services can now be reassigned in real time, you’ll need to rethink how you bid.
• Real-time bidding strategies matter more than ever. With market conditions changing dynamically, relying on static bid submissions could leave money on the table—or worse, expose you to unnecessary risk.
• Battery operators need to be more strategic. SOC constraints will now directly impact both energy and ancillary service bids. This means managing charging and discharging strategies in a whole new way.

The bid-to-bill process is changing.

• More real-time price volatility. If you’re not actively managing exposure, market swings could impact profitability.
• New settlement rules and cost allocations. The way you get paid (or charged) for ancillary services will shift, so financial teams need to be ready.
• More granular data will be required. Real-time market participation means more reporting, more data tracking, and more complexity in billing processes.

Your systems might not be ready.

• Systems need to be updated. The way you handle co-optimized bidding, real-time settlements, and SOC constraints might need adjustments.
• Telemetry and SCADA systems need to be on point. ERCOT will require more accurate real-time SOC data for storage assets, and manual processes won’t cut it.
• Automation will be key. Relying on manual bid submissions or outdated forecasting models could put you at a competitive disadvantage.

Compliance and market participation will require more attention.

• ERCOT’s protocols are changing. Understanding and adapting to new market rules will be critical.
• Training is critical. Market analysts, traders, and operations teams will need to be up to speed on how to navigate RTC+B effectively.
• Market trials are coming. ERCOT is running extensive testing between May and November 2025. If you’re not participating, you’re missing an opportunity to work out the kinks before go-live.

 

How to Prepare

With all these changes on the horizon, the best strategy is to get ahead of the curve. This isn’t the kind of thing you want to scramble to fix at the last minute. Based on what we’ve seen in other market shifts, the organizations that invest in process optimization, system upgrades, and team training early will have a much smoother transition (and fewer headaches).

Here are some key focus areas to ensure readiness:

• Evaluate your market readiness. Where do your current operations, bidding strategies, and systems stand against RTC+B requirements? A structured gap analysis can help identify areas that need improvement.
• Reassess your bid-to-bill processes. Take a close look at how you forecast, bid, and settle transactions. The new real-time co-optimization framework may require adjustments to avoid unnecessary costs.
• Upgrade technology where needed. If your ETRM, SCADA, or forecasting tools aren’t set up for RTC+B, now’s the time to make the necessary enhancements.
• Train your teams. From trading desks to back-office settlements, everyone needs to understand how RTC+B changes the game. Developing targeted training sessions will help teams adjust smoothly.
• Engage in ERCOT’s market trials. Testing your strategies in ERCOT’s simulations will help fine-tune operations and reduce risk before go-live.

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Change is coming to ERCOT, and while RTC+B offers a lot of benefits, it also introduces new challenges that market participants need to prepare for now. The good news? If you take the time to evaluate your readiness, adjust your strategies, and upgrade your systems before the deadline, you’ll be in a strong position to capitalize on these market changes rather than just react to them.

The bottom line: Don’t wait until Q4 2025 to start figuring this out. The time to prepare is now.

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