A landmark shift has arrived in the Texas wholesale electricity market.
ERCOT’s Real-Time Co-optimization plus Batteries (RTC+B), which went live on December 5, 2025, brings batteries into the pricing conversation for the first time. This market design is expected to translate into lower prices and more reliability for energy consumers by helping the grid more efficiently reflect supply and demand from a variety of energy production sources.
Here is a breakdown of what the RTC+B changes mean for you as an energy buyer or investor.
What RTC+B Means: The Promise of Lower Costs, Backed by Data
Smarter Pricing, Lower Volatility
If you take away nothing else from this post, remember that RTC+B is the simultaneous co-optimization of both energy and Ancillary Services. Ancillary Services are core operating functions that make the grid run efficiently, like voltage or frequency control through transmission wires, back-up power supply, and more – including batteries.
By combining the energy itself and the support functions that make the energy flow efficiently, ERCOT can have the flexibility to dispatch resources in real-time – especially batteries – to respond to moment-to-moment shifts in demand.
A Shift in Scarcity Pricing
Until now, ERCOT has used a typical Operating Reserve Demand Curve (ORDC) for pricing, which implements price changes as energy resources on the grid are scarce. Producers of energy who were ready to go online in the case where supply dipped, like batteries, were compensated for it; energy users (demand-side) were incentivized to use less energy or risk paying higher prices. However, this didn’t take into account the difference in value for each of these back-up solutions.
Now, this ORDC for scarcity pricing is being replaced with individual Ancillary Service Demand Curves (ASDCs). These ASDCs create a demand curve for each specific type of ancillary service, showing the value of each of these solutions to grid stability. For the first time, batteries are being incorporated into the bidding process – which could change the game.
Projected Cost Savings
The shift is expected to deliver massive economic benefits. ERCOT’s Independent Market Monitor (IMM) has projected wholesale market savings of $2.5-$6.4 billion annually in reduced energy costs.
The Battery Revolution is Integrated for Stability
The “plus Batteries” (RTC+B) component is a major win for grid reliability and flexibility, benefiting every buyer.
For the first time, Energy Storage Resources (ESRs), like large-scale batteries, are fully integrated and modeled as a single device with a state-of-charge. This allows the real-time market to capture their full capability—both charging (consuming power when it’s cheap and plentiful) and discharging (injecting power during times of peak demand).
This will benefit renewable integration – faster, smarter responses to the uncertainty that comes along with solar and wind power are easier to manage when their generation is combined with backup power from batteries. Better asset utilization can lead to a reduction in total system costs by preventing the wasteful curtailment of clean, free solar power. This means short-term weather events, such as an early sunset or unexpected drops in wind, won’t be as much of an issue.
Natural gas is expensive during peak hours, and making it easier to shift towards cheaper renewable resources in real-time with the support of batteries will mean a more resilient grid.
What does this mean for Battery Players?
It’s unclear yet how this story will impact long-term battery revenue opportunities. On the one hand, it could be positive for the points shared above: batteries are finally getting their moment in the sun (pun intended).
But others wonder: if batteries are no longer as scarce, and there is no longer as much volatility in the market thanks to these stabilizing mechanisms, the price for storage / batteries will be impacted (i.e., they aren’t called on as the reserve as often, where they could command premium prices).
In Summary for Buyers
The RTC+B project is a generational leap for the ERCOT market – and we’ve been baking this into our forecasts for a while. REsurety forecasts model this new change under a wide range of scenarios to help you develop a comprehensive view of changing asset or contract values in this new RTC+B world.
For the energy buyer, this successful implementation should deliver key results: increased grid reliability and lower total costs to the system.
- Lower Total Costs: Driven by multi-billion-dollar projected market savings through more efficient dispatch, smarter scarcity pricing, and optimized resource utilization. Coupled with the story of rising demand and straining supply potentially pushing prices higher, prices for batteries might rise, but the system should see lower total costs.
- Increased Grid Reliability: All else equal, RTC+B stands to deliver on this goal. Skyrocketing load may impact grid reliability overall, but this will certainly cushion the blow.
With the emergence of these more evolved bidding strategies and the ability to recommit batteries in the real-time, storage investors may be able to expect the way batteries make money to change yet again. All in, from a contracting perspective – buyers exploring the market will want to take a look at hybrid vs. standalone project dynamics, and consider Day-Ahead/Real-Time Spreads when determining strategy.
