From Coal to Code: Keppel's A$10B, 720MW AI Hub Rises in Victoria's Latrobe Valley

From coal to code: Keppel to build A$10 billion AI hub in Victoria's Latrobe Valley

Keppel has secured 720MW of "Powerbank" capacity to anchor a new AI data centre campus on the former Morwell power station site, about 150 km east of Melbourne. This is one of the biggest single-site compute plays in Australia, with capacity that eclipses many current Asia-Pacific clusters. The plan sets the precinct up to scale past 1GW over time.

For real estate and construction, this is a clear signal: heavy-industry land with strong grid access is the new frontier for AI infrastructure. The opportunity sits at the intersection of energy, land reuse, and high-spec delivery.

Why Latrobe Valley makes sense

The site repurposes existing high-capacity grid connections built for coal generation. That shaves years off typical delivery and avoids inner-city bottlenecks. Proximity to Melbourne keeps latency down while unlocking cheaper land and fewer urban constraints.

The Victorian government has been supportive of regional projects that create long-term skilled jobs. With multiple renewable projects planned in Gippsland, the energy story strengthens over time.

What "Powerbank" means in practice

Powerbank here isn't a battery. It's a banked allocation of grid capacity reserved for AI data halls. AI workloads demand higher rack densities, more cooling, and stable power delivery compared to traditional cloud.

This campus is being built to handle liquid cooling from day one. Expect higher heat loads, tighter MEP tolerances, and rigorous commissioning requirements.

Scope at a glance (what gets built)

• Grid interface: new or upgraded substation, high-voltage switchgear, transformers, and underground feeders.
• Core data halls: scalable blocks with liquid-ready cooling, high-density racks, and redundant electrical paths.
• Mechanical systems: heat exchangers, chillers or direct-to-chip loops, pumping stations, and controls.
• Water strategy: closed-loop systems, water treatment, and metering; alternatives for dry/hybrid cooling where feasible.
• Site works: roads, drainage, security, earthing, and hardened perimeters.
• Connectivity: diverse long-haul fibre, meet-me rooms, and carrier-neutral entry.
• Support buildings: operations centres, storage, workshops, and logistics bays for frequent hardware swaps.
• ESG measures: energy efficiency, renewable PPAs, and plans for future green integration.

Scale and leasing logic

Securing 720MW up front is the hook for hyperscale tenants. Microsoft, Google, and Amazon look for sites that can scale without tripping power ceilings. With land and power locked, pre-commitments become easier and phasing can track demand.

Total precinct investment is expected to reach A$10 billion over the life of the project. Buildings are the tip; the real moat is guaranteed capacity and delivery speed.

Timeline and delivery

Phase one is slated for completion by 2027. The site will roll out in stages, bringing data halls online as tenants commit.

For contractors, expect multi-year frameworks, modular methods, and long-lead procurement to start early. Power works, switchgear, and liquid-cooling components will sit on the critical path.

Jobs and supply chain

Construction will require thousands of roles across civil, electrical, mechanical, controls, fibre, and security. After delivery, ongoing jobs span facility engineering, cybersecurity, and operations.

Local suppliers can win on steel, concrete, earthworks, transport, prefabricated plant skids, and maintenance. Apprenticeships and upskilling pipelines will matter; this is a long run, not a quick hit.

Sustainability and energy strategy

AI compute has a big energy appetite. Keppel is targeting high efficiency and a path to green power using regional renewables. Gippsland's offshore wind plans and solar pipeline could help match steady demand with clean supply over time.

Water use and heat rejection need early clarity. Closed-loop liquid systems and heat recovery options should be weighed against local climate, water rights, and community expectations.

Victorian offshore wind program

What developers and owners should prepare

• Grid agreements: connection, augmentation plans, and commissioning windows with clear milestones.
• Planning and approvals: remediation of a former power site, environmental permits, heritage, and community engagement.
• Procurement: long-leads (transformers, switchgear, pumping hardware, controls, GPUs), vendor lock-in risks, and dual-sourcing.
• Design principles: modular blocks, repeatable MEP, liquid-ready from the base build, and space for future energy systems.
• Contracts: outcome-based SLAs, phased handover, and penalties tied to usable MW, not just practical completion.
• ESG and reporting: energy mix, PUE targets, water intensity, and audit-ready data for tenant disclosures.
• Security: physical hardening, zoning, and coordinated cyber standards aligned with tenant requirements.

Risks to manage

• Power delivery delays and grid congestion.
• Cooling tech shifts outpacing design decisions.
• Equipment shortages and inflation on electrical gear.
• Workforce availability during overlapping infrastructure booms.
• Community concerns around water, noise, and construction traffic.

Mitigation is straightforward: lock long-leads early, design for density headroom, maintain optionality on cooling, and keep a transparent dialogue with the community.

Why this matters for Australia

Local AI capacity improves data sovereignty and latency for Australian users. It also makes room for startups, universities, and enterprises to build and train models without sending workloads offshore.

This project signals that Australia is ready to host serious compute at scale. For real estate and construction, it opens a durable pipeline of high-spec work backed by global tenants.

Keep an eye on

• Grid planning updates and regional capacity signals from AEMO: Integrated System Plan.
• Renewable PPAs and storage add-ons that firm the site's energy profile.

Practical next steps

• Developers: map brownfield sites with strong transmission access and fast permitting paths.
• Contractors: pre-qualify for multi-year frameworks; secure partnerships for liquid cooling and high-density electrical fit-out.
• Investors: evaluate staged funding tied to leased MW and energy milestones rather than just shell delivery.

The shift from coal to code at Morwell is real and big. With 720MW banked and a plan to scale past 1GW, the Latrobe Valley is set to become a core node in Australia's AI buildout. The work ahead is disciplined, technical, and very buildable.

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