By LIAM DURKIN
A MEGA-DEAL that will see a $10 billion data centre built near the former Hazelwood power station site is being proposed.
Singapore-based Keppel Ltd. has secured the rights to lease 123-hectates of local industrial land.
With the previous infrastructure in place, the site is appropriately zoned and was identified as a unique location due to its direct access to the power grid and existing non-drinkable water source which is required for the operation of the data centre.
If green lighted, the data centre would become the largest AI infrastructure site in Australia.
Keppel has advised it would like to brief Latrobe City Council on the proposal.
Latrobe City Mayor Sharon Gibson said the news was significant as the region looks to lock-in future employment in the wake of power station closures.
“Latrobe City has powered Victoria for generations and is now uniquely placed to support the next era of industry, including data, digital and clean-energy-enabled infrastructure,” she said.
“Our existing transmission assets, industrial land, water access, freight connectivity and incredible skillset make the region a nationally significant location for large-scale, energy-reliant investment; we’re here and we’re ready to grow”.
Latrobe City Council is waiting to receive a planning application from Keppel, that needs to outline
controls to address any impacts on adjoining landowners.
As part of an Agreement for Lease, Keppel will pay Australian energy and infrastructure landowner Lightwood an annual access fee to gain early access to the site for pre-development works, including obtaining planning approvals and contracting power and water, before its private data centre funds take up long-term leases.
It is anticipated the powerbank expansion will have a gross power capacity of up to 720 MW, in phases and over time.
Strategically located within the proposed Gippsland Renewable Energy Zone, the site is situated at one of the state’s largest electricity nodes.
Its ability to have a dedicated transmission connection to neighbouring power terminal stations provides the potential for power cost savings by bypassing the local distribution network.
Zoned to allow data centre development, the site also benefits from existing water infrastructure and proximity to intercity dark fibre networks, which will enable connectivity to Melbourne, Sydney and Canberra.
Member for Morwell, Martin Cameron welcomed the proposal.
“This is great news for the Latrobe Valley and a show of confidence in our industrial landscape and workforce capacity,” he said.
“It makes perfect sense for companies to invest here – we’ve got water, power and land in abundance – so I look forward to the state government enabling this investment to take shape.
“Hopefully this will have a ripple effect for other investors and shows the Latrobe Valley is well and truly open for business.”
Fellow Nationals MP, Melina Bath (Member for Eastern Victoria Region) added her enthusiasm.
“Any announcement for private investment in Latrobe Valley is encouraging, but what matters most is the opportunity it creates in terms of skilled employment,” she said.
“I look forward to seeing the project translate into secure local jobs, stronger industries and long–term regional economic growth.
“Over the coming months business, government and the community must work together to ensure it delivers the greatest possible benefit for the Latrobe Valley.”
Keppel Chief Executive of Connectivity, Manjot Singh said Hazelwood had been identified as an ideal location.
“Digitalisation and AI are reshaping global compute needs, and Keppel is positioning ahead of this megatrend by investing upstream to secure early and exclusive access to power, water, and fibre connectivity at strategic sites in key datahubs,” he said.
“Our powerbanking strategy enables us to deliver shovel-ready capacity at speed and scale, significantly shortening time to development and service readiness, and without overburdening our balance sheet.
“We are in active discussions with hyperscalers and neoclouds regarding the future capacity provided by the site, many of whom have expressed keen interest in Melbourne – one of Australia’s fastest-growing data centre markets.”
The company said the site near Morwell offers significant scalability, with clear pathways to securing competitively priced green power, non-potable water for cooling, and low-latency fibre connectivity, making it a compelling location to site next-generation AI campuses.
Federal Member for Monash, Mary Aldred has advocated for strong data security since entering Parliament, and said the development looked promising.
“Jobs and investment are critical to our region’s future. I’ve floated the opportunity of data centres in the Latrobe Valley for sometime, particularly because they will be essential for cyber security and new technology,” she said.
“I’m keen to understand the detail of what is being proposed but am pleased our community has new job prospects in front of us.”
As state and federal governments progress net zero commitments, Latrobe City says it is well positioned to remain the epicentre of the energy economy – supporting renewable generation, stable and continuous energy, hydrogen and emerging industries that rely on secure, large-scale power supply.
