Texas grid operator starts real-time co-optimization of energy, ancillaries in December 2025

The Electric Reliability Council of Texas announced Sept. 13 its plan to launch real-time co-optimization of energy and ancillary services Dec. 5, 2025, about six months earlier than the originally planned mid-2026 time frame.

Real-time co-optimization involves dispatching energy and ancillary services in the real-time market in such a way that the least costly resource is used first. Currently, ERCOT procures various types of ancillary services in the day-ahead market and does not usually move ancillary service commitments between resources in the real-time market.

"The implementation of Real-Time Co-optimization is the most significant market enhancement to the Real-Time Nodal market design since its inception in 2010," said ERCOT President and CEO Pablo Vegas. "The target go-live date represents an important milestone in ERCOT's confidence for planning and tracking the completion of the RTC project for a more dynamic and efficient wholesale power market."

Ancillary services involve a variety of types of resources, both supply and demand, that help ensure system reliability by maintaining stable frequency and voltage on the transmission system. The Public Utility Commission of Texas directed ERCOT in February 2019 to implement real-time co-optimization as soon as it was practical, at an estimated cost of about $40 million and about four to five years of work.

In the aftermath of the deadly mid-February 2021 winter storm that left about 4 million ERCOT customers in the dark, some for days, RTC work was put on hold. In June 2023, ERCOT estimated the project may cost about $50 million and would then take three to four more years of work.

A June 2018 cost-benefit analysis conducted by Potomac Economics, ERCOT's independent market monitor, concluded that if RTC had been in effect in 2017, it would have saved the following:

• $1.6 billion in energy costs
• $257 million in system congestion costs
• $155 million in ancillary service costs
• $11.6 million in production costs
• $4.3 million in system reliability costs

RTC originally did not assume the involvement of battery storage, but that resource's operational capacity in ERCOT has grown from 275 MW at the end of 2020 to almost 8.9 GW as of the end of August, according to ERCOT's Capacity Changes by Fuel Type Charts.

Now known as RTC+B within ERCOT, because of battery involvement, the new system will have market trials starting in May 2025 and run through November 2025, ERCOT said.

"Once implemented, these enhancements will provide operational and reliability benefits to the ERCOT system as well as estimated annual wholesale market savings in excess of $1 billion," said Keith Collins, ERCOT vice president of commercial operations. "We expect significant savings to pass down to Texas electric consumers as a result."