The small town, 10 kilometres south of Daylesford, became the first town in Australia to establish a community-owned renewable energy project on Saturday.

A 110-metre wind turbine was raised, to the delight of onlookers and the 1600 owners of the wind farm.

More than $8.7 million was invested by collective members as part of the $13 million project.

Hepburn Wind is behind the project – which is expected to generate more power than Daylesford uses each year.

Members of Hepburn Wind who invested in the project will share in the proceeds of the sale of electricity and the remainder of the money will be put towards a community fund.

Hepburn Wind member Kate Allsopp said she “loved the idea of the community owning our energy source”, while fellow member Belinda Martin said she “can’t wait to see our turbines spinning”.

Chairman of Hepburn Wind Simon Holmes a Court said the project was a culmination of six years’ hard work.

He said it was fantastic to see a community develop it without waiting for the government.

“Our project is not about building two wind turbines, it is about empowering local people to become engaged and active participants in responding to the challenge of climate change,” he said.

About 12,200 tonnes of CO2 are expected to be displaced each year.