On Thursday they celebrated with the company at a function at the Dundonnell Hall to mark the beginning of construction of the $560 million 80-turbine wind farm itself.

Work on upgrading and sealing the Woorndoo-Streatham Road, and installation of the transmission lines began in January.

Spokesman for the landholders, Will Lynch, who will have seven of the 80 turbines on his property, said the group first approached wind farm company Newen in 2007.

In about 2014, the project was sold on to what became Tilt Renewables, Mr Lynch said.

"The landholders as a group thought we had a good wind asset out here, plus the fact that we're fairly isolated out here," he said.

Mr Lynch said Dundonnell, which has a population on 46, along with the wider Mortlake community would benefit from the project.

Tilt Renewables chief executive Deion Campbell said the project would grow the company by 50 per cent. "It's a really big thing for us," he said.

"The first foundation area is being scraped of top soil today."

He said it would be another year before the first turbine started producing power. It will be fully commissioned in October 2020.

The company has also opened a quarry onsite where they will source most of their materials.

"There's been two blasts so far and there'll be another 40 tonnes of TNT used to open up the next part of the quarry," he said.

"That will be quite a big bang I suspect."

The project will create 200 construction jobs, 1500 indirect jobs and generate enough energy to power 245,000 homes.

General manager of renewable development Clayton Delmarter said Dundonnell's tranmsission lines were being constructed to allow the neighbouring wind farm proposal at Mt Fyans to share the infrastructure.

A 15km section of the 38km transmission line will be capable of carrying two sets of conductors to service the wind farms.

"What that means is Mt Fyans, if it does go ahead, they do not need to build any new transmission infrastructure outside the wind farm boundaries," he said.

He said that if it had put the transmission line underground like Moyne Shire councillors suggested last week, it wouldn't be possible for the two projects to share the cable.

"They would have to duplicate the infrastructure overhead or underground," he said.

"What we've tried to do with Dundonnell we do see as a positive.

"We completely understand the frustration of people saying there's multiple lines and who's doing what."

Some of the major components for the wind farm will be made at Vestas' new turbine assembly plant at the former Ford factory in Geelong.

About 87 per cent of the power generated from Dundonnell has been contracted to both the Victorian  Government, under the Victorian Renewable Energy Auction Scheme, and to the Snowy Hydro.

Moyne shire will get a $730,000 boost to its rates revenue with the construction of two new windfarms near Mortlake kicking off.

Work on both the Dundonnell and Mortlake South wind farms will take the total revenue the shire receives from wind farms to more than $1.6 million.

The council already receives $896,000 from the operational wind farms of Macarthur, Codrington, Yambuk, Salt Creek and Moretons Lane. This week, plans for a proposed $875 million 700MW wind farm at Hexham were revealed - a project that would boost council coffers by $900,000.

With another 700MW in the pipeline for the shire, that could bring Moyne's total rates from renewables to more than $3 million.

Cr Ian Smith said this week that rates from energy companies made up 10 per cent of the shire's rates revenue.

Wind farm projects were drawn to Moyne Shire because of its proximity to the major 500kV transmission line that runs across the state.

However, national windfarm commissioner Andrew Dyer said that had created an issue with having a concentration of projects located in the same area such as the completed Macarthur and planned Willatook, Penshurst, Hawkesdale, Woolsthorpe and Ryan's Corner projects.

"You can understand why the community might get a bit grumpy at the prospect of having turbines in all directions," he said.

"The reason that proponents are looking at those sites are not just because there's a bit of wind there it's because that's where the grid is."

Terang's 220kV transmission line between Ballarat and Moorabool has been earmarked for a priority upgrade by 2021 as part of a $5.2 million project for minor augmentations which also includes the lines from Red Cliffs to Wemen and Kerang to Bendigo lines.

It is part of a call from the Australian Energy Market Regulator (AEMO) for a $370 million staged project for upgrades across the state in response to predictions of an extra 5000 megawatts of renewable energy to be built in Western Victoria by 2025.

Executive general manger of planning and forecasting David Swift said that without adequate capacity on the 220kV transmission network, energy projects would be heavily constrained which would, in the long term, force up the price of electricity.

National Wind Farm Commissioner Andrew Dyer said the state needed a longer-term vision for how it will generate power over the next 10 to 20 years

Mr Dyer said Victoria's power grid was designed around the brown coal resource of the Latrobe Valley, and the state's main 500kV power line runs from there across Moyne Shire to Portland. "When you look at where the more optimal locations are for wind and solar...they tend to be where the grid isn't," he said.

Mr Dyer said that while the 500kV was not yet in danger of running out of capacity, the other smaller lines across the state needed to be strengthened with some already full, preventing the construction of any more projects there.

Mr Dyer said he believed the 220kV Terang line, where the Salt Creek and yet-to-be-constructed Mortlake South wind farm feed into, was constrained around Mr Gellibrand.

Tilt's general manager of renewable development Clayton Delmarter said AEMO faced a major challenge with Australia's grid running out of capacity.

He said because its Salt Creek windfarm was a smaller project, it was not economically viable to connect to the 500kV line which is why it ran 66kV transmission lines to Terang, while Dundonnell was large enough to wear the fixed cost of connecting to the 500kV system.

Ironstone Capital director Alistair Craib said its joint venture with Enerfin at Woolsthorpe would begin construction of its $130 million 20-turbine wind farm by July.

Mr Craib said it would use the existing powerlines from Woolsthrope to the Koroit sub-station and were working with Powercor to upgrade the line to make poles and wires more sturdy.

Meanwhile the Clean Energy Council has called for an urgent review of the Marginal Loss Factors (MLF) arrangements to avoid unpredictable hits to the financial stability of existing and future renewable projects.

Under AEMO's draft calculations, some wind and solar farms face cuts to their income of up to 20 per cent.

The council's chief executive Kane Thornton said that in the past few years there had been significant and unexpected annual decreases in MLFs which is the loss of electricity as it travels from power generators along pole and wires to customers.

"While this is a complex issue, the consequences are simple," he said. "The issue also underlines the need for efficient investment in new poles and wires to relieve the strain on the existing network which is rapidly becoming congested."

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