How ERCOT’s upcoming RTC+B program could unlock new value streams for storage

In just over six months, ERCOT will roll out a market reform that’s poised to dramatically reshape battery storage economics in Texas. 

The Real-Time Co-optimization plus Batteries (RTC+B) initiative, which is set to take effect in early December, will allow the market to optimize ancillary services and energy simultaneously in real-time. This will reduce overall costs and make it easier to dispatch energy resources more efficiently. It could also open up new value streams for storage assets.  

So, what’s different? Under RTC+B, batteries will be recognized not just as generation or load, but as flexible assets.  

“In the current market, your battery can either be charging or discharging,” explained Jay Jayasuriya, a principal at Sendero Consulting who advises several utilities and developers preparing for RTC+B. He told ESS News that charging batteries function as a load on the grid and discharging batteries are classified as a generation asset. But, he added, under this structure, “you can only discharge 50% because otherwise you’d change your profile.”  

Currently, ERCOT procures ancillary services only in the Day-Ahead Market and batteries have a limited ability to switch dynamically or participate fully in both energy and ancillary service markets.  

Jayasuriya noted that this rigidity has historically led to missed revenue opportunities or penalties when batteries couldn’t deliver their expected capacity due to scheduling mismatches or technical constraints. 

“If you bid too much into the market, you got penalized,” he said. “But, if you can’t commit, you also get penalized.” 

RTC+B would effectively eliminate that worry by making a new battery profile that enables better utilization of battery capacity. This is because the model lets storage to be dispatched based on the current grid conditions instead of pre-committing to just one mode of operation.  

From a market perspective, Jayasuriya explained, that means risk reduction, smoother operating practices and increased profitability and reliability.  

“You’re no longer penalized for deploying differently than expected, because the system itself is optimized to reflect what’s actually possible in real time,” Jayasuriya explained, adding that this could be particularly impactful for colocated and behind-the-fence battery assets.  

Facilities with onsite storage (like data centers or industrial power plants) will be able to utilize their battery capacity more strategically to discharge during peak pricing events, avoid demand charges or bid excess capacity back into the market.  

“There’s going to be some excitement from these bigger load-drawing facilities,” he added, explaining that the flexibility makes batteries more enticing. “Whenever you have that market flexibility, you’re going to see more investment into the technology that creates it, and you’ll see more innovation.” 

With better-defined revenue streams and fewer operational risks, Jayasuriya said, storage becomes a more bankable proposition. 

Still, RTC+B hasn’t arrived yet. Market trials began in May and will run through November. It’s a particularly narrow window for developers to update their asset telemetry, test new systems and make sure their software can handle the new dispatch protocols. That’s why, from Jayasuriya’s perspective, developers “might be behind come December if they don’t get involved in the market trials now, since getting ready for all those changes isn’t easy.”