How MAP Revolutionizes the Sale of Storage Capacity
Matrix Global is a leading innovator in the energy storage sector. Storage facility operators and their customers can now transact efficiently, transparently and cost-effectively using the Matrix Auction Platform (MAP).
How MAP Revolutionizes the Traditional Auction
MAP was developed to optimize the value of the facility’s storage assets through the creation of proprietary short-term physical bilateral agreements and financial derivatives products.
- Creation and management of independent auction “portals” for vetting bids and setting unique auction criteria
- Publicly verifiable history of all bid placements and the bid selection process
- Reduced carrying costs through consolidation of bid marketing, due diligence and closing process
- Real-time, online data access for all auction participants for increased transparency and efficiency
How MAP Benefits Its Participants
Provides flexibility and reduces credit exposure through storage future contracts and bilateral physical forward agreements.
The world’s first crude oil storage futures contract has made it easier to acquire storage on a short to intermediate-term basis. This mitigates counterparty risk through either a clearinghouse guarantee (for futures contracts) or upfront payment by purchasers (for bilateral physical forward agreements), and at the same time reduces credit exposure found in term contracts.
Post-auction, these contracts can be traded, increasing a company’s flexibility. The value of a storage futures or bilateral physical forward agreement has a direct correlation to a calendar spread option, due to the inherent optionality embedded in both. With a better understanding of this dynamic, trading companies can develop more sophisticated approaches in making both their derivative and physical trading decisions.
Improves the adaptability demanded by refiners seeking assured supply
Refiners face a balancing act between their onsite storage, opportunities available in the supply chain and unscheduled outages.
Storage contracts offered through the Matrix program allow refiners to acquire storage on an as-needed basis. This gives refiners the flexibility to manage their inventories without the exposure of acquiring long-term storage. Since the transaction will be either a futures contract or bilateral phsucal forward agreement, there is an added layer of flexibility for the end user.
Enables alternative means to contract for storage assets
Historically, storage operators have used long-dated contracts to sell energy storage. As a result, the pool of potential purchasers has been limited to large, well-capitalized companies that can absorb the costs of carry and also physically accept and schedule large deliveries.
The MAP opens the storage market to customers who have short-term storage needs and to smaller, less frequent purchasers. Additionally, by selling storage through short- and intermediate-term contracts, storage operators can leverage the optionality inherent in storage contracts and capture the value of a steeper contango.
Storage operators can reduce their counterparty risk through the MAP program – strorage futures enable operators to directly face an exchange clearinghouse rather than customers, while physical forward agreements eliminate term risk by requiring customers to pay upfront for storage.
The MAP is easily scalable and can be expanded geographically, which enables storage operators to create liquid hubs wherever their facilities are located.