The policy was announced at the campaign launch of Greens candidate for Morwell Dan Jordan and would result in $150 million in state and federal funding being directed to projects such as geothermal energy.

Mr Jordan, joined at the launch by Greens candidate for Eastern Victoria Samantha Dunn, said the Greens would attempt to institute the policy ``as soon as we're in a position to legislate both at a state and a federal level''.

``In terms of jobs we're expecting to create thousands of jobs, potentially 43,000 jobs, throughout Victoria,'' Mr Jordan said.

``A lot of those will be located here in the Valley in pursuit of renewable manufacturing jobs.''

Mr Jordan said the Latrobe Valley had been identified by the Melbourne Energy Institute ``as potentially a really good source of geothermal power''.

``They're talking about putting it into place a pilot plant for as little as $20 million,'' he said.

``We're looking at getting some renewable energy from geothermal in a very short time if they're given the money.''

The announcement follows the decision by Labor to provide a $217,000 grant for energy company Hot Dry Rocks to establish a pilot geothermal plant.

However Mr Jordan described the Labor plan as ``window dressing'' and ``green washing''.

``It's going to go nowhere and it's going to go to a private company,'' he said.

However, Labor candidate for Morwell Graeme Middlemiss defended the ALP's plan and said the Greens' proposal would be a ``devastating loss of jobs''.

``Labor's proposals are to move toward... cleaner technology while retaining employment focus in the Valley,'' Mr Middlemiss said.

``The best possible value for taxpayers is a small pilot plant to see if a geothermal will work in Victoria and that's precisely what Labor has funded.''

Despite these claims Ms Dunn said the Greens remained committed to the Valley and highlighted the importance of transitioning to renewable energy.

``What I can assure the people of the Valley is we won't be leaving them behind,'' she said.

``We will be looking after them and making sure they transition into new industries.''