This incident is particularly serious, but many similar ones have occurred across the battery energy storage systems (BESS) sector. Although the battery fire rate per GWh installed has decreased, the total number remains significant when considering all installed batteries, due to the increasing number of installations in data centers, electric vehicles, and other applications.
Stricter safety standards have been in place since 2020, but this incident highlights the need for further improvements in battery safety as their deployment continues to increase worldwide.
What is lithium-ion battery overheating?
Overheating describes a situation in which exothermic reactions within the battery pack trigger further exothermic reactions, causing the temperature to rise to the point where extreme degradation and combustion of volatile gases and liquids are likely to occur. It can spread from one battery cell to another in a matter of seconds, and from one pack to another in a matter of minutes.
In large-scale deployments with hundreds of packets and thousands of cells, such as in the Daejeon City data center, the consequences of overheating can be catastrophic, both from a security and financial point of view for the owner, not to mention the disruption and security of the services provided by the data centers.
Battery fires in South Korea
According to the National Fire Agency, 296 battery fires occurred in South Korea in the first half of 2025, resulting in 23 fatalities and 22.4 billion South Korean won in damages. These fires involved batteries from electric vehicles, consumer electronics, secondary batteries, and primary batteries of varying chemical compositions. If this rate of incidents continues into 2025, it would represent an increase compared to 2024, when a total of 543 incidents occurred throughout the year, which in turn was an increase compared to 2023, when 359 incidents took place.
The increase in incidents is mainly due to the growing use of batteries, for example, in electric vehicles and stationary energy storage. One of the worst battery fire incidents in recent years in Korea occurred at a factory owned by Aricell, a manufacturer of primary lithium batteries. On June 24, 2024, in Hwaesong, 23 workers died in a fire caused by a battery failure, out of the 100 who were working at the factory at the time. Aricell came under intense scrutiny following this incident, which led to the resignation and indictment of its CEO.
The circumstances surrounding this fire indicate a lack of industrial safety standards at the factory. This incident highlights the dangers of battery fires and the negative perception that serious incidents like this can generate. Korea has had many problems with battery fires in the past: a series of battery fires in 2018 caused a significant slowdown in its BESS industry at the time, as well as product freezes, and indirectly led to the creation of the EPRI battery fire database, which monitors BESS battery fire incidents worldwide.
Regulation and the rise of data centers
In the age of artificial intelligence, and amidst a growing reliance on cloud-based and internet services, the energy demands of data centers have increased. Data centers are increasingly employing battery energy storage systems as a source of renewable energy. By combining BESS with renewable energy sources, such as solar panels, green energy can be supplied while simultaneously stabilizing the peak demand that fossil fuel-powered grid sources would otherwise provide.
Data centers are one of the world's largest energy consumers, requiring a total power consumption of around 75 GW by 2025, a figure expected to more than triple in the next decade. This makes them a key target for increasing sustainability and reducing their carbon footprint, as outlined in IDTechEx's recent report: Sustainability for Data Centers 2025-2035. This necessitates managing their electrical loads securely and reliably, reducing grid surges to save on data center electricity costs, and ensuring uninterruptible power supplies (UPS). This can be achieved with cleaner energy technologies, such as BESS (Battery Energy Storage Systems), instead of diesel generators.
However, the safety standards governing BESS in terms of thermal management and prevention of out-of-control systems remain somewhat deficient, with fragmented regulations from one region to another.
The United States has the strictest regulatory framework, specifically the UL standards, but these are not binding on their own, only for participating states that apply NFPA codes. Europe requires the CE mark for new energy storage systems, but this does not count as third-party proof since it is self-declared, meaning it cannot be used in the United States.
China has improved its regulations on electric vehicle batteries, but has fallen behind in terms of regulations on battery energy storage and power (BESS). China recently approved GB 38031-2025, which will come into effect in July 2026 and is the world's first "no fire, no explosion" regulation, meaning it requires compliance with sufficient safety standards to eliminate the risk of fire in electric vehicle batteries. This could have a ripple effect on BESS batteries, as major battery suppliers (e.g., CATL, BYD) target both markets. However, since there is no single globally recognized safety standard for BESS, further regulations and the development of a unified standard are needed to ensure that battery safety in data centers can be achieved with a greater degree of confidence.
Solutions to improve the safety of battery storage in data centers
There are several ways to improve battery safety, each of which requires regulatory support to achieve large-scale implementation and success:
- Improvements in thermal management. The use of active thermal management technologies, including liquid cooling systems and aerosol fire extinguishers, and passive fire protection materials are key strategies for reducing the risk of battery fires and explosions, as explained in the forthcoming IDTechEx report: Thermal Management, Fire and Explosion Protection for BESS 2026-2036. By effectively venting heat from damaged cells, as well as integrating more heat-resistant pack, cell, and enclosure designs (for example, by using thermally resistant materials such as ceramics, mica, and insulating foams), overheating can be prevented from occurring and from spreading between cells and packs. This approach is also used in all cases where there are high-power computing deployments, including server racks in data centers. For more information, see the related IDTechEx report: Thermal Management for Data Centers 2026-2036.
- Improved diagnostics and monitoring also play a significant role in preventing battery fires. This includes both cell diagnostics and battery pack monitoring using sensors. By employing AI-enhanced modeling methods and machine learning, the battery module's state of health (SoH) can be accurately tracked, allowing for the estimation of battery cell degradation before failures occur that could generate excessive heat and lead to a battery fire. For more details, see the IDTechEx report on AI-Driven Battery Technology 2025-2035. Integrating gas and pressure sensors, as well as humidity sensors, into the pack can also enable much earlier warnings of thermal overheating than is currently possible. During overheating, battery cells release flammable gases into the battery pack casing. By detecting the accumulation of these gases, thermal overheating events can be identified up to 25 minutes before a battery fire occurs, as explained in detail in the recent IDTechEx report: Advanced Sensors for Batteries and Remote Monitoring 2026-2036.
- Alternative Energy Storage Technologies. Another approach involves using alternative energy storage technologies. Lithium-ion batteries are ubiquitous in many industries due to their high energy density, reasonable cycle life, and reasonable power density; however, for specific industries, alternatives exist. For BESS, for example, redox flow batteries (RFBs) can be used in data center applications. Although vanadium RFBs are typically more expensive, they offer a longer cycle life, a lower levelized cost of storage, and, importantly, a non-flammable electrolyte. Redox flow batteries are primarily developed as a form of long-duration energy storage system, defined by IDTechEx as a system where the storage time exceeds 6 hours. However, they could be used in data centers, as their non-flammable electrolyte is a key advantage, making them safer than lithium-ion BESS. Redox flow batteries (RFBs) could be used to provide key applications in a data center, much like a lithium-ion battery storage and electrical system (BESS), including surge shaving, UPS, and managing volatile computing load applications. As detailed in IDTechEx’s forthcoming report, Redox Flow Batteries 2026–2036, many players are developing RFB technologies, with Chinese company Rongke Power leading the way in terms of global deployment capability. A similar solution is to use solid-state batteries, which are also considered inherently safer due to the absence of a liquid electrolyte. Solid-state batteries are beginning to be deployed in China, although their high cost may preclude their use in BESS. For more information, see IDTechEx’s recent report, Solid-State and Polymer Batteries 2025–2035, and speak with the team about an upcoming report on redox flow batteries.
Conclusions and perspectives
Lithium-ion batteries are not an inherently safe technology due to their flammable electrolyte. However, through proper management, improved diagnostics, and potential design advancements or the integration of alternatives, large-scale battery fires can be prevented. The Chinese standard GB 38031-2025 is a step in the right direction, but by focusing solely on electric vehicles, regulations on battery energy storage systems (BESS) are lagging behind.
IDTechEx's position is that only with effective, globally adopted safety standards can the identified solutions for preventing catastrophes like the one in Daejon City be practically implemented. Greater transparency is also needed regarding the root cause of thermal runaway problems, which could be achieved through the use of AI-based diagnostics and advanced sensors. However, BESS developers may be reluctant to publicly disclose the root causes due to an inherent conflict of interest: revealing that the root cause stems from a product defect or a component failure from a third-party supplier could have negative business consequences.
Meanwhile, BESS developers will continue striving to find holistic approaches to thermal management and fire and explosion protection for BESS, from active cooling and fire suppression systems to passive fire protection and flame-resistant materials. These technologies and subsystems, developed by leading players in the materials and chemicals industry, their adoption by major BESS manufacturers, and 10-year market forecasts for the growth of these materials and technologies are discussed extensively and in detail in IDTechEx's forthcoming market report: Thermal Management, Fire and Explosion Protection for BESS 2026-2036.
