Fire has gutted Hydro Tasmania's Tungatinah Power Station at Tarraleah in the Central Highlands, taking a 142-megawatt plant that supplies about five per cent of Tasmania's electricity out of service for what the company says will be "an extended period of time". The fire was reported about 9pm on Wednesday and declared contained at 1.02am on Thursday. Nobody was on site and no injuries were reported.

Tasmania Fire Service crews reached the station 27 minutes after the Triple Zero call at 8.50pm. At the peak of the response 25 crews and about 45 firefighters were on scene, drawn from New Norfolk, Hobart, Bridgewater, Hamilton, Ouse and other brigades, with aerial platforms sent from Hobart and Launceston.

They were confronted with a fire that was spread fully across the building," TFS deputy chief officer Matt Lowe said. "It was a difficult fire for our crews, but they did the best they could.

About 300 customers in Tarraleah, Bradys Lake and Bronte Park lost power. The Lyell Highway is closed between Victoria Valley Road and Fourteen Mile Road, with diversions in place, and the public has been asked to avoid the area. The cause is unknown. Fire scene examiners are investigating.

Hydro Tasmania chief executive Rachel Watson said the building had sustained extensive damage and that the state of the generating equipment was still being assessed. "Unfortunately, from what we can see of the damage, we expect the power station to be out of service for an extended period of time," she said. No cost estimate and no timeline for a return to service have been given.

Tungatinah was the second station built in the Derwent scheme, commissioned between 1953 and 1956 with five turbines. It is one of 10 stations in the scheme and the fifth-largest in the state. Hydro Tasmania, which is owned by the state government, opened the station to public tours in March.

Watson said the company's other stations were unaffected. "It's not unusual for us to have a power station out of service and we'll manage the system as needed to support Tasmania's energy needs," she said. Premier Jeremy Rockliff said: "I want to assure Tasmanians there is no risk to Tasmania's power and energy supply." Energy Minister Nick Duigan gave the same assurance, and TasNetworks interim chief executive Renee Anderson said the network "is designed to withstand an incident like this".

What the fire will cost, and who pays to rebuild a 70-year-old publicly owned asset, has not been addressed. Preliminary findings on the cause are expected later on Thursday.