Melbourne's data centre boom sparks fire fears

Insiders within Victoria's fire authority have revealed concerns about an influx of large-scale data centres in Melbourne's west, calling for greater oversight due to the facilities' significant volumes of diesel and lithium-ion batteries.

Three members of Fire Rescue Victoria (FRV), who are familiar with data centre planning applications and spoke to the ABC on the condition of anonymity, said they were concerned about the centres' complex fire risk, FRV's lack of authority over planning applications and the need for specialised training in case of emergency.

They specifically cited the risk of thermal runaway, a phenomenon where lithium-ion batteries undergo an uncontrollable chemical reaction that produces significant amounts of heat, resulting in the release of highly toxic fumes and an intense, self-sustaining fire.

"Firefighters are pretty well practised in dealing with your bread-and-butter sort of fire — house fires, factory fires," one FRV member said.

"If we're looking at thermal runaway … it's not how long's a piece of string. It's a very complicated response.

"The combination of lithium batteries and diesel is a pretty nasty sort of fire."

It comes as documents released under Freedom of Information laws reveal that Victoria's workplace safety investigator WorkSafe previously objected to a Melbourne data centre's planning application due to its plans to store 510,000 litres of diesel on site.

In a letter dated December 2024 and addressed to the Department of Transport and Planning (DTP), WorkSafe raised concerns about an application for the Perri Melbourne Data Centre (PMDC) in West Footscray.

"Its proximity to a residential area, just 10 metres to the south, raises safety concerns for families and individuals in nearby detached dwellings and medium-density housing, who could be directly impacted by a potential fire incident," the letter read.

But three months later, WorkSafe amended its decision, approving the application on the condition PMDC seek written advice from Fire Rescue Victoria's Dangerous Goods unit and undertake a fire safety study.

Data centre expansion planned

FRV members told the ABC the unit's advice is not enforceable by the organisation, particularly as it is not the determining authority for planning decisions, and said they wanted FRV to be made a mandatory referral authority.

"The fire brigade are the ones who have to deal with it if it turns to s***," one FRV member told the ABC.

"It's just critically important that [data centre companies] come to us early. It's difficult to get changes once pipes are getting laid," another member said.

Data centres operate 24/7, and primarily rely on back-up diesel generators and, increasingly, lithium-ion batteries to ensure an uninterrupted power supply and prevent data loss in the event of a grid outage.

Planning documents show a $1 billion data centre in Port Melbourne by ASX-listed tech giant NextDC plans to store 3.5 million litres of diesel and 900 tonnes of lithium-ion batteries on site.

The application, fast-tracked under the state government's Development Facilitation Program, was approved in 75 days.

During that time, informal notice of the application was also provided to FRV, which offered no objection subject to various conditions.

In a statement to the ABC, an FRV spokesperson said the organisation provided fire safety advice "within its legislative limit".

"Any planning decisions are made by the relevant authority," the FRV spokesperson said.

In West Footscray, another of NextDC's data centres — located just a block from PMDC and spanning 41,000 square metres — currently houses 40 back-up diesel generators, with each 20-cylinder engine said to be capable of producing 4,030 horsepower.

A proposed, and contentious, expansion would see that increase to 90 generators (with plans to store an additional 1.2 million litres of diesel on site), a figure NextDC chief executive Craig Scroggie told the ABC's 730 in March he would like to see increase to more than 100 generators.

When combined, the PMDC and NextDC data centres in West Footscray could see an estimated 2.4 million litres of diesel stored within a few hundred metres of each other, and the surrounding neighbourhood.

Data centre fires 'rare' but difficult

While fires in data centres are rare, they pose significant challenges to firefighters due to the combination of high-voltage equipment, lithium-ion batteries and complex building layouts.

Last year, a fire at a South Korean data centre caused by an exploding lithium-ion battery reportedly took more than 200 firefighters nearly 22 hours to extinguish, the intensive operation hampered in part by the inability to use water.

Despite the increasing inclusion of battery management systems, and fire prevention and suppression measures in data centres, FRV members also want the focus to be on facility layouts themselves to improve accessibility to battery rooms.

"The security in these places, it's basically a prison,"

an FRV member said.

"They're very secure, there's compartment after compartment … to perform a rescue could be very difficult."

The National Construction Code does not set out specific requirements for data centres and developments must instead meet the general fire safety requirements that apply to multi-residential, industrial and office buildings.

A FRV spokesperson said the safety of firefighters and the community more broadly was its "number one priority".

"FRV recognises that the significant quantities of diesel fuel and lithium-ion batteries, which data centres may contain, require careful management through design, fire protection systems, emergency planning, and operational controls," the spokesperson said.

"FRV supports early engagement on complex developments, including data centres, to ensure fire safety and emergency response considerations are appropriately addressed during the design phase and the highest level of risk assessment is completed."

Air quality concerns in Melbourne's inner west

For residents in Melbourne's inner-west, concerns over diesel generators at NextDC's West Footscray data centre focus on a more immediate issue: air pollution.

The area, located near the Port of Melbourne resulting in high volumes of diesel truck traffic, is a known air pollution hotspot, with a landmark study recently finding children with asthma living in the west were far more likely to end up hospitalised.

Yarraville resident Glen Yates has monitored air pollution levels across the inner west for more than three years using multiple air quality monitors.

Fearing that the introduction of several new data centres could worsen pollution in the inner west, last year Mr Yates installed an air quality monitor near the NextDC data centre. A second, higher-quality monitor was also installed last month.

"From a baseline data perspective, I can absolutely pick from my data pre-data centre and post-data centre," Mr Yates said.

"The spike in PM 2.5 (fine particle air pollution) is significant.

"If the data centre has to come off the grid and move onto those diesel generators, you may as well be standing next to an idling truck at a busy intersection. That's just what it's like."

In April, a submission to a NSW inquiry into data centres by the Centre for Safe Air warned of health harms caused by back-up diesel generators, describing them as "one of Australia's most significant unregulated sources of harmful air pollution".

"These diesel generators must be tested regularly — weekly to monthly depending on capacity — emitting significant quantities of air pollution," the submission said.

"During a blackout, the combined emissions from these diesel generators can pose a significant risk to public health."

Further analysis of Mr Yates' collected data was carried out by data and research professional Sean Brown, a founding member of the Citizens of Tottenham community group which opposes NextDC's expansion.

Mr Brown says his analysis of 153 days of data confirms NextDC is regularly testing the diesel generators at its West Footscray data centre.

"I noticed a pattern," Mr Brown told the ABC. "It spiked, on Sunday evenings, once a month."

"There's no construction activity, there's less vehicles. It's very telling that it's happening then.

"And it's unique — the Yarraville sensor did not pick that up at all."

In a statement to the ABC, a spokesperson for NextDC said back-up diesel generators at its West Footscray data centre undertake "routine testing and maintenance activities to ensure operational readiness," but did not specify the frequency.

"These activities are conducted in accordance with relevant planning approvals, environmental requirements, safety regulations and compliance obligations," the spokesperson said.

Calls for greater data centre transparency

While subject matter experts in their respective fields, Mr Yates and Mr Brown willingly concede they're not environmental or data centre professionals — which is why they want an independent environmental assessment carried out on NextDC's planned expansion, with the findings to be made public.

"There's three playgrounds within 500 metres of it, there's a primary school within 500 metres of it, there's a maternal child health centre and a kindergarten and a swimming centre all within 500 metres," Mr Brown said.

"And there's two data centres [including PMDC] that are going to be built here."

It's a call backed by local Labor MP Katie Hall, who notably in April wrote to Victoria's Planning Minister Sonya Kilkenny to raise the concerns of her constituents regarding the NextDC expansion.

"To date, residents have received no advance warning of diesel generator testing and would like air quality monitoring in place at the existing facility where a recent unplanned outage resulted in fumes considerably impacting nearby households," Ms Hall's letter read.

Mr Brown works in the tech sector. He says he's not against data centres, or AI — he simply wants more guardrails.

"It needs to be acknowledged that these are fundamentally different buildings to what regulations were designed for many years ago.

"It shouldn't fall to community members to even raise these questions."

A Victorian Government spokesperson said fire agencies are consulted through the planning process.

"Every project goes through a rigorous assessment process and must have stringent fire safety measures," the spokesperson said.

"Approval is only granted if stringent fire safety requirements are met."

A spokesperson for WorkSafe said it was "committed to ensuring community safety is not compromised by decisions on land use and development proposals involving dangerous goods".