ERCOT's RTC+B Market Reform and Its Impact on Clean Energy Assets

ERCOT's Real-Time Co-Optimization Plus Batteries (RTC+B) market reform, implemented on December 5, 2025, marks a transformative shift in Texas's energy landscape. This overhaul, the most significant since the Standard Market Design 15 years prior, redefines how energy and ancillary services are co-optimized in real time, with batteries modeled as unified resources. For clean energy investors, the reform unlocks new revenue streams while introducing advanced risk management tools, positioning Texas as a testbed for grid modernization.

New Revenue Streams for Clean Energy Investors

The RTC+B framework replaces outdated supplemental reserve markets with a dynamic system that co-optimizes energy and ancillary services every five minutes. This shift is particularly advantageous for battery energy storage systems (BESS), which are now treated as single, flexible assets rather than separate generation and load components. By aligning battery dispatch with real-time grid conditions, the reform enables operators to capture higher margins from ancillary services.

For instance, data from H1 2025 reveals that 42% of BESS revenue in ERCOT came from ancillary services, a figure expected to grow under RTC+B. The introduction of Ancillary Service Demand Curves (ASDCs) further enhances this opportunity by incorporating scarcity pricing into real-time dispatch decisions. This mechanism ensures that ancillary services are valued based on their actual contribution to grid stability, creating a more transparent and lucrative market for BESS operators.

Moreover, the elimination of day-ahead ancillary service awards under RTC+B allows batteries to adjust their participation dynamically, responding to fluctuating demand and renewable output. This flexibility is projected to reduce system costs by $2.5 to $6.4 billion annually, with a portion of these savings likely flowing to investors through improved dispatch efficiency and reduced penalties for load mismatches.

Risk Management Tools in a Dynamic Market

While the RTC+B model introduces opportunities, it also demands sophisticated risk management strategies. The real-time co-optimization process requires advanced tools to manage state-of-charge (SoC) constraints. For example, BESS operators must now deploy optimization software that integrates real-time forecasting and market signals to avoid under-optimization risks.

Academic analyses highlight the role of tools like Enverus's SCUC/ED engine in modeling the benefits of RTC+B, including reduced total system costs and enhanced renewable integration. These tools enable investors to simulate scenarios and refine bidding strategies, ensuring they capitalize on price volatility while mitigating operational risks.

Additionally, the ASDCs embedded in the RTC+B framework act as a risk buffer by dynamically adjusting the value of ancillary services based on scarcity. This reduces the likelihood of overpaying for reserves during low-demand periods while ensuring adequate compensation during critical events. For investors, this creates a more predictable revenue environment compared to the static Operating Reserve Demand Curve (ORDC) system it replaces.

Conclusion

ERCOT's RTC+B reform is a landmark step toward a resilient, clean energy future. By co-optimizing energy and ancillary services and integrating batteries as unified resources, the model not only enhances grid efficiency but also provides clean energy investors with scalable revenue opportunities and robust risk management tools. As Texas's grid evolves, stakeholders who adopt advanced analytics and adaptive strategies will be best positioned to thrive in this dynamic market.