One of the largest battery storage sites in the world has caught fire.

At around 10:15 a.m. local time on Friday, a fire broke out at a 300MW Tesla Megapack site in Australia’s Victoria state.

The site was not yet connected to the grid, and operator Neoen Australia said that the fire happened during testing. Tesla built the hardware, but Neoen was responsible for the construction and operation of the site.

"A 13 tonne lithium battery in a shipping container is fully involved with crews wearing breathing apparatus working to contain the fire and stop it spreading to nearby batteries," Fire Rescue Victoria said in a statement. Each Megapack shipping container can store up to 3MWh of electricity in its lithium-ion cells.

The regional fire services added: "An FRV HAZMAT appliance is on scene conducting atmospheric monitoring with a Scientific Officer in support. FRV’s specialist RPAS (drones) unit has also been deployed."

Locals have been advised to stay indoors, close windows, and turn off any cooling systems that use outside air, due to a toxic smoke warning.

The cause of the fire is not yet known.

The battery site is key to Victoria's renewable energy transition, as it helps the state deal with the intermittent power provided by renewable energy sources. It is also set to help interconnection capacity between the states of Victoria and New South Wales.

This story is developing, we will update it as we learn more