Australia’s Largest AI Campus Revealed for Hazelwood Site
Plans for what would reportedly be Australia’s largest AI campus have cleared a significant hurdle.
Singaporean asset manager Keppel has secured the rights to lease a 123ha site near Morwell in Victoria where it is plotting a $10-billion data centre.
The company’s connectivity division has reached an agreement with Australian energy and infrastructure landowner Lightwood Group to access the site near the former Hazelwood Power Station, 156km south-east of Melbourne.
Keppel chief executive of connectivity Manjot Singh Mann said Keppel would pay an annual access fee for pre-development works, including planning approvals and power and water contracts before its private data centre funds take up long-term leases.
“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 data hubs,” Singh Mann said.
The site is within the proposed Gippsland Renewable Energy Zone with direct access to one of Victoria’s largest electricity nodes.
Power capacity would reach 720 megawatts across multiple phases. A dedicated transmission connection to neighbouring power terminal stations could enable cost savings by bypassing the local distribution network.
Keppel said it was in active discussions with hyperscalers and neoclouds interested in Melbourne’s data centre market. These include Amazon Web Services, Microsoft Azure and Google Cloud, as well as neoclouds focused on artificial intelligence applications.
A neocloud is a new type of cloud provider that specialises in high-performance, GPU-centric infrastructure for AI, machine learning, and other compute‑intensive workloads.
The site would have access to existing water infrastructure, industrial zoning for data centre development and Telstra’s intercity dark fibre network connecting Melbourne, Sydney and Canberra.
Latrobe City mayor Sharon Gibson said, “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”.
Keppel has addressed questions about water sourcing and any potential impacts on the planned Latrobe Valley coal mine rehabilitation by proposing the use of non-potable water from existing infrastructure connected to the former Hazelwood Power Station for cooling operations.
Singh Mann 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”.
The Latrobe City Council said it would receive a planning application from Keppel addressing impacts on adjoining landowners.
The proposal would lead to significant private investment for the region as coal-fired power station closures approach in 2028 and 2035.
The Keppel proposal follows other major data centre announcements across eastern Australia.
NextDC confirmed a $7-billion data centre at Sydney’s Eastern Creek in late November with ChatGPT owner OpenAI as the major customer.
The company also received development approval from the Victorian Government for its $2-billion M4 technology campus at Fishermans Bend Innovation Precinct in Port Melbourne, while industrial developer Goodman last week filed a request for environmental assessment requirements in January for a $5-billion data centre at Eastern Creek.
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