A western Queensland shire council says it will go ahead with a plan to build a $3.5 million geothermal plant.

The Winton Shire Council said it would need to borrow some money for the construction but a geothermal power plant could save $15 million over 20 years in electricity costs.

The plan is to use heat from artesian water as an energy source to power council buildings.

Mayor Butch Lenton said the plant should be operational by the end of 2016 and would help ensure the small town's sustainability.

"Anything to do with the sustainability of small towns I think councils have got to look towards it," he said.

"As we know in the last while funding has been cut back in a lot of different places with governments and if we want to live out here, and we do, we wish to live out here and enjoy living out here, we've got to make it the best that we can."

He said the facility could operational by the end of next year.

"We wouldn't have pulled it on if there were risks. There's been plenty of homework on it and [we've] been over it and over it," he said.

"We think it's a great way to move forward and geothermal power plants have been around before, they're all over the world.

"There's one in Birdsville, this is just the latest technology one - just really looking forward to it."