'Absolute shemozzle': Offshore windfarm decision looms for south-west zone

But the looming decision comes as the federal government puts a spanner in the works for the Victorian government's plans to upgrade the Port of Hastings to be able to ship offshore wind turbine components.

There are currently no ports in Victoria suitable for offshore wind construction with the Port of Portland revealing last year it would need a significant upgrade if it was to be used for the construction of the five windfarms currently touted for the area.

An upgrade worth hundreds of millions, probably more, was needed if the Port of Portland was to be used.

In June last year, Federal Minister for Energy and Climate Change Chris Bowen announced consultation on a proposed wind zone which stretches from Warrnambool to Port MacDonnell in South Australia which would make it one of Australia's energy powerhouses.

The backlash was swift.

More than 150 attended a public meeting in Portland - which opponents say will leave the town surrounded by wind turbines both onshore and offshore.

Four companies have announced plans for wind farms in the zone and an fifth has signalled its interest.

The proposed 5100-square kilometre wind zone could be home to 14 gigawatts of renewable power - enough for 8.4 million homes.

Federal Environment Minister Tanya Plibersek on Monday rejected plans to build the terminal at Hastings south-west of Melbourne because it was listed as a globally significant wetland and the move would have "clearly unacceptable impacts" on the area.

However, Victorian Premier Jacinta Allan said the government was confident it could successfully mitigate the environmental impacts of the terminal.

Member for South West Coast Roma Britnell said the government had found themselves in an "absolute shemozzle," she said.

"The government has found themselves in a position where they haven't dotted all their i's and crossed all their t's."

Meanwhile, the federal government revealed it would make an announcement on the south-west's offshore wind zone early this year.

Ms Britnell said she had concerns about the offshore windfarm zone because it was in a whale migration pathway, and the Bonny Upwelling which provided all the nutrients for the precious ecosystem.

"We are one of very few of those in the world," she said.

"Until we can be confident that the government's processes are robust, I think we should be very nervous about the decision they're making.

"This just proves that we should be watching closely as a community.

"Trust that we need to have in the system, for me, has been even more eroded by this example of the state and federal government at loggerheads with each other."

Ms Britnell said the government had certain key performance indicators it wanted to meet with its energy targets but she feared it would come at a cost to the environment.

"Doesn't strike me as a government that's organised and concerned about the environment, they're concerned about the development of the windfarms at all costs and the environment seems to be the one suffering in this journey they say they prioritise," she said.

The government has pledged to install nine gigawatts of offshore wind generation capacity by 2040 - roughly 25 per cent of the grid's current capacity.