AGL's Oaklands Hill project near Glenthompson is the first of many farms planned for Southern Grampians Shire and will produce 63 megawatts of electricity, enough to power 35,000 homes.

Energy and Resources Minister Peter Batchelor said 80 construction jobs would be created at the site and tipped hundreds more as other developments progressed.

"The south-west is up and running; they're an early adopter," he said.

"They're going to be, accordingly, the early beneficiaries of the new renewable energy surge that is coming. With the broad-acre farming that's undertaken here, this adds a very welcome income source for the farmers who have got hilly outcrops in their land."

Southern Grampians Shire Mayor Marcus Rentsch said turning the first sod at Oaklands Hill was an exciting occasion.

"We have other wind farms that we have approved, but to actually get one moving is really great," he said.

"We've got to do things to conserve our environment, and I believe more and more of our community are coming on board to realise that we can't rely on fossil fuels."

The site is expected to save 185,000 tonnes of greenhouse gases each year and will play a key role in powering a new desalination plant at Wonthaggi.

Turbines will be built on 388 hectares of grazing land belonging to Gavin Leech, who said he seized a chance to be part of the project.

"Once the construction's finished you've got extra income coming in, so it's certainly a help," he said.

Mr Batchelor admitted he had been frustrated by delays in amending the national renewable energy target, which critics felt was biased towards home solar systems.

A state target in place since 2006 had attracted investment worth $2 billion, he said.

"It has been very frustrating in having our scheme fit into the expanded federal scheme.

"If they get (the revised target) right it'll bring on renewable energy investment, particularly in this part of Victoria."

AGL's general manager of power development, Ken Woolley, said Oaklands Hill's first wind tower should be spinning by early next year, with construction to end by late 2011.

Mr Woolley said the company remained confident its 174-turbine project at Macarthur would secure final approval.