Ballarat East MP Geoff Howard announced the funding last week at the site of the Leonards Hill wind farm.

Unlike large wind farms which connect through substations to major transmission lines, smaller projects such as the one being developed by Hepburn Wind can connect directly to the local distribution network.

Connections at this scale have not been implemented in Victoria before.

"The grant will help Hepburn Wind, the local network operator, Powercor, and the builders of the wind farm, REpower Systems, to develop and implement what is expected to become a standard design for community renewable energy projects," Mr Howard said.

Hepburn Wind chairman Simon Holmes agrà Court said distributed generation would play a significant role in Australia's transition to a low-carbon future.

"Our community is the first of many that will harness local resources to contribute clean-power into the electricity grid," he said.

"This assistance will help simplify the process and reduce the connection costs for future community renewable energy projects."

Minister for Regional and Rural Development Jacinta Allen approved the grant from the Regional Infrastructure Development Fund's Regional Electrical Access Program in April, which recognises that the cost of new and upgraded electrical connections in regional locations can

be high.

REAP provides grants of up to 50 per cent of the customer's contribution where the customer is a business and the works will improve the local energy capacity for surrounding properties.

Hepburn Wind is a community co-operative with more than 1160 members. The $12.9m two-turbine wind farm is expected to be in operation in the first half of 2011 and is projected to produce more than 12,200 megawatt hours of clean electricity annually - more than is used by the houses

in Daylesford.