State Energy and Resources Minister Peter Batchelor announced yesterday $500,000 in grants would go towards developing a geothermal atlas measuring the heat flowing through the ground at 100 locations across the state, including the Wimmera, Mallee and Western District.

Yarriambiack Shire's environmental officer Matt Wellington said the grants were a positive step towards increasing renewable energy in the state and the shire would try to attract testing in the region.

"From the shire's perspective we really encourage something like this; anything renewable we fully endorse and encourage," Mr Wellington said.

"We would be hopeful for positive results. The Department of Primary Industries has undertaken some thermal imaging from satellites and there is some mapping which suggests there could be geothermal activity in the shire."

Mr Batchelor said the new data would largely be collected from an existing network of groundwater bores. The best geothermal resources would be where high heat flow interacted with good insulation, to create high temperatures at shallower than usual depths.

"The State Government has bores across the state and we have them in the shire," Mr Wellington said.

"If they were to discover geothermal activity here and energy works commenced, it would have quite large benefits to the shire, through employment and development and also a sustainable future.

"As a shire we would like to be a leader with regard to renewable energy development, whether it be through geothermal, solar or wind power."

Mr Batchelor said geothermal energy was a clean and green renewable energy source generated from naturally occurring heat from hot rocks deep below the surface.

"A clean environment is crucial to our future and we know generating power from geothermal resources has the potential to play an important role in changing the energy mix in Victoria and cutting our greenhouse gas emissions," Mr Batchelor said.