A Tesla grid-scale lithium-ion battery has gone up in flames in Australia with residents told to stay indoors to avoid hazardous smoke.

The fire broke out late yesterday (Tuesday) at the A$60m ($38m) 50MW/100MWh Tesla Megapack battery energy storage facility nicknamed 'Big Bessie' in the town of Bouldercombe, Queensland.

The owner of the battery, Australian renewable energy and storage developer Genex Power, said in a statement today that the “minor fire” was being allowed to burn out.

Queensland police issued a statement saying that the battery is “currently causing hazardous smoke in the immediate area.

“Police will continue to monitor the situation as there are a large number of batteries on site and there is a possibility the fire may spread to other units, creating a larger hazard.”

A total of 40 Tesla Megapack 2.0 batteries are installed at the Big Bessie site, which went live just two months ago and is nearing the end of its commissioning phase.

The police said that nearby residents should check police social media sites “and be prepared for police to door-knock homes in the area if the situation worsens.”

It said that residents should “close windows and doors and those with respiratory conditions are urged to keep their medications close by.”

The force said that “work is being done to dowse the surrounding batteries and could continue for several days.”

The fire is being treated as “non-suspicious,” it said.

Genex said it will with work Tesla to “investigate the root cause of the incident.”

Tesla was contacted for comment.

Matt Canavan, a senator for the Liberal National Party in Australia, wrote on X (formerly Twitter) that the fire showed that Australia's "new energy grid is worse than our old energy grid."

He was swiftly responded to by federal climate change and energy minister Chris Bowen, who wrote that Canavan's party "will find any excuse to demonise renewables”.

“A gas bottle caught on fire at a service station in my electorate last week. It set off a series of explosions and a major fire. I don’t remember you drawing a conclusion about energy safety from that?”

Local Australian MP Barry O'Rourke said when the battery facility launched that the “landmark project,” which could power more than 4,000 homes annually, signalled a “monumental shift in Central Queensland’s energy profile as more renewable energy comes into service”.

The battery was tasked with taking renewable energy produced from local rooftop solar panels and other nearby wind and solar farms.

Lithium-ion batteries are a cornerstone of the energy storage industry, which is playing an increasingly important role in supporting wind and solar projects.

However, safety issues continue to plague such batteries, with New York recently launching a safety probe into battery energy storage after a third blaze in the state this year left residents warned to stay indoors.

The ongoing issues have prompted increased research into safer alternatives, including zinc-based batteries or other more novel approaches to energy storage such as storing energy in concrete blocks or molten salt.