These are LFP batteries -- no fire risk. No idea where hazmat would come from but these are entirely contained & modular & need only an electricity connection. I have no idea on earth why you think more batteries would make the grid *less* reliable.
Because they're being asked to the job of utility-scale energy but perhaps without protection from code-level environmental loads (wind, earthquake, etc.).
It's possible to do it well. I don't know what design standards they have in mind.
LFP batteries are definitely not no fire risk. They're less than NMC, but they are still a large electrochemical energy storage, with possibilities of shorts and other electrical risks