Battery Maker Backed by African Fuel Company Seeks More Cash

(Bloomberg) -- A U.K. battery maker backed by the biggest producer of fuel from coal is raising new funds to develop novel technology for airplanes, drones and spaceships.

Oxis Energy Ltd.'s lithium-sulfur batteries eliminate some of the safety hazards of the batteries that has kept them out of commercial use, said Chief Executive Officer Huw Hampson-Jones. The Oxfordshire, England-based seeking new investors to join South Africa's Sasol Ltd. and other high-net-worth individuals who already have stakes.

While most of today's batteries store energy inside packs stuffed with lithium, those can react badly to shocks. Oxis says it manufactures units that can withstand bullets and nails and overcomes the problems that made earlier lithium-sulfur batteries unsafe for widespread use. The ruggedness of that technology could become important safety advantage for industries with razor-thin margins of error like aviation and space exploration. And its ability to store energy exceeds the capabilities of current lithium-ion batteries, the company said.

“We're currently looking at three to four times” the energy density of lithium-ion batteries, Hampson-Jones said. “It's proven.”

The biggest difference between ordinary batteries and Oxis's device is the kind of lithium in it. Normal packs have the element in salt form. Oxis's work uses a lithium metal.

Lithium metal in energy storage isn't new. It was actually the original material that scientists were trying to make batteries with in the 1980s. Those units were unstable and judged found to be too dangerous, according to Linda Nazar, a professor of chemistry at the University of Waterloo in Canada.

Previous Efforts

“Lithium-metal has a safety feature,” Nazar said. “It reacts with the electrolyte and can cause short-circuiting in the cell. It can catch fire, or the cell would just die.”

Oxis has figured out how to remove this risk, according to Hampson-Jones. The company has spent $70 million to develop this technology. It's working on using them in electric transportation such as cars, buses, trucks and the metro system of a “major European city.” He said NASA is testing it for possible use in high-altitude missions. NASA officials didn't comment.

“Lithium-sulfur batteries are larger and lighter than lithium-ion, so they could be better suited to applications where the weight rather than space is the priority,” said James Frith, energy storage analyst at Bloomberg New Energy Finance. “Passenger cars will still probably be the domain of lithium-ion because of the space constraint.”

Oxis reported revenues of 1.7 million pounds ($2 million) last year, up 89 percent from the year before. It has yet to break even, said Hampson-Jones, who plans to raise another 15 million pounds by November. The new capital would help Oxis commercialize its batteries, with production beginning by 2022, according to the CEO.

Technology Critics

Critics of the technology such as Karl Kreder, director of energy at Consensus Systems and a former battery engineer at the Southwest Research Institute in Texas, are skeptical that lithium-sulfur batteries have a future.

“Lithium-sulfur is a technology that, if you look at one or two metrics, promises to be revolutionary,” Kreder said. “But if you look at it on the seven metrics that you need to make a viable system, it's terrible on the other five.”

Even if all goes well, Oxis still has some competition. Sion Power Corp. in Arizona is working on a similar technology for vehicles, stationary energy storage and drones as well. Another group in Dalian, China is also researching the technology.

To contact the reporter on this story: Anna Hirtenstein in London at ahirtenstein@bloomberg.net.

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Jonathan Tirone