Spanish-based Acciona Energy has announced it will kick start a $400 million turbine project in March based in the Mount Gellibrand district, 20 kilometres north-east of Colac.

Work on the 63-turbine site will start six years after the project was originally given the green light by Spring Street, the lag due to internal planning by the company.

The wind farm has been scaled down from its initial proposal of 116 turbines although the small-scale site will generate enough electricity to power 88,000 houses.

Colac Otway Shire mayor Stephen Hart said the development would provide immediate economic stimulus to the municipality during 2012.

He said there had been broad community support for the wind farm which will encompass farm land north of the Princes Highway between Winchelsea and Colac.

“While the wind farm is smaller than we originally thought, I understand the power generated by these wind turbines is greater than what was seen only five years ago,” Cr Hart said.

“Renewable energy technology seems to move ahead in leaps and bounds. Most of the turbines will be erected on flat land, despite the fact they’re situated close to Mount Gellibrand.”

The project needed final government approval before construction could begin, but was not subject to new planning laws announced by the Baillieu government in August giving households a right of veto over turbines within two kilometres of their home. The revised laws apply to new applications only.

Acciona Energy generation director Brett Wickham said the farm would create about 200 jobs during construction and 16 ongoing positions once it was operational.

He said up to 10 of the 149-metre turbines would be built within two kilometres of homes and could have been affected if the plant had been proposed under the new planning regime.

“The project would have been less viable because these projects are marginal and essentially we could have less turbines to pay off what is a significant investment in (power) grid connection and other things,” Mr Wickham said.