U.S. hedge fund Magnetar takes Lyon to court

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Brisbane-based solar and storage developer Lyon Group is embroiled in a court case over a wind up notice issued by U.S.-based hedge fund manager Magnetar Capital, which was brought in two years ago to support the developer’s highly ambitious plans.

Magnetar made an investment in Lyon in 2017 to support the development of its large-scale solar PV projects in Australia with an eye on the group’s project pipeline comprising more than 1,700 MW of large-scale solar PV and more than 1,000 MW of large-scale battery storage.

While it sees the ongoing court proceeding as Magnetar’s attempt to capture a greater share of its solar pipeline of projects, Lyon is looking to buy out Magnetar’s 25% stake.

“Lyon and Magnetar have been negotiating Magnetar’s exit,” the company said in a statement.”Lyon will vigorously defend any attempt by Magnetar Solar to capture a greater share of the value in Lyon and its projects”.

“Lyon will not bow to any attempt by Magnetar Solar to seek to exert maximum commercial leverage in the context of the growing value of Lyon Group and its dispatchable solar projects.”

This is the second legal battle for Lyon, after U.S. solar giant First Solar sought the winding up of a Lyon Group unit over an unpaid loan in 2017.

Solar peakers

Lyon recently partnered with  Japanese energy giant JERA and battery technology provider Fluence to deliver the tranche 1 of its solar+storage projects.

Originally slated to break ground in 2017, Lyon’s tranche 1 projects include: Cape York Solar Storage in Queensland with a solar PV capacity of 55 MW and 20 MW / 80 MWh of battery storage; Nowingi Solar Storage in Victoria with a solar capacity of 250 MW and 80 MW / 320 MWh; and Riverland Solar Storage with up to 330 MW of solar and 100 MW / 400 MWh storage in South Australia – which, once constructed, could claim the title of the world’s largest solar+battery plant. 

Describing the $150 million Cape York Battery Power Plant as the first fully integrated grid-connected large dispatchable solar peaker in Australia boasting four hours of storage, the company reported in December the project had secured its generator performance standard, clearing the way for construction to begin in early 2019.

In the latest release, Lyon says its other two major projects (Riverland and Nowingi) are now progressing toward that milestone.

“Lyon believes that solar peakers will quickly take the place of gas peakers because their speed of dispatch, lower and more predictable operating costs and by extension lower risk offers unparalleled flexibility,” the company said.

Eager to secure funding for its gigawatt plans, Lyon entered into a partnership with Japan’s Mitsubishi Corp in 2016, a year before it welcomed Magnetar among its investors, with the goal to roll out 1 GW of solar + 500 MWh of battery storage by 2020.

Announcing Magnetar’s first investment in the Australian solar sector, Lyon lauded Magnetar’s expertise in energy investment, noting that the hedge fund had previously invested in 32 solar projects in the UK representing 344 MW.