EMERGENCY services were called to an electrical fault at the Mortlake Power Station when one of two generating units was extensively damaged.
An Origin Energy spokeswoman said a generating unit at the Mortlake Power Station experienced an electrical fault early on Monday morning.
She said an explosion did not occur.
"The generating unit's fire detection system activated and the local CFA unit attended the site," she said.
"Operational control was handed back to Origin at approximately 8.30 am.
"Origin is undertaking an investigation to determine when the unit can be returned to service."
It could take up to six months for the generating unit to return to capacity.
Country Fire Authority commander Paul Marshall said a fire alarm was activated at 6.13am on Monday morning.
"Three CFA appliances responded from Mortlake and Warrnambool," he said.
"Mortlake arrived on scene first and firefighters donned breathing apparatus to access the building.
"There was no fire present, but certainly there was a reasonable amount of smoke present.
"The smoke had been caused as a result of an explosion in one of the generators.
"That has caused significant damage. At the end of the day there wasn't that much required.
"From the CFA point of view we made sure the incident was safe and there was no other hazards."
Mortlake is a gas-fired power station comprising two generating units each of 292 MW.
One generating unit remains available for the market.
The power station provides up to three per cent of the state's power needs.
It is the largest gas-fired power station in Victoria.
The peaking power station is powered by gas from the Otway Basin.
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