More than 200,000 Victorians lost power on Friday as the state's electricity supply buckled under extreme heat.

So what happened, and do we need to get used to this kind of thing?

Why did the lights go out?

A perfect storm of events placed the energy system under unusual strain on Friday, causing demand for power to outstrip supply.

Temperatures reached the 40s in much of the state, and high humidity made it feel even hotter, driving demand for air conditioning.

At the same time, three electricity generation units at coal-fired power plants in the Latrobe Valley were out of action (two due to unexpected outages, one due to planned maintenance) which reduced the amount of available power.

To make matters worse, the hot weather reduced the efficiency of the coal-fired power stations that remained online, further reducing the available supply of electricity.

These problems removed about 1,800 megawatts of electricity from the grid.

To try to make up the shortfall, the Australian Energy Market Operator (AEMO) dipped into emergency energy reserves and imported power from New South Wales, Tasmania and South Australia.

It paid heavy energy users such as Alcoa's aluminium smelter in Portland in western Victoria to power down, and encouraged consumers to conserve energy by delaying using appliances such as dishwashers.

But even after taking these measures, the operator did not have enough power to meet demand in Victoria, and turned to its last resort option of load shedding.

Elwood office workers left work early after power was cut in the suburb, using the time to enjoy a beer in a dark cafe nearby. ( Supplied: Sofie Godefrooij )

What is load shedding?

Load shedding is when power companies start switching off their customers' power supply because the entire system is at risk.

Just after midday, AEMO ordered electricity distributors to load shed, causing brownouts in different parts of the state on a rotating basis.

Over the course of the afternoon, more than 200,000 customers experienced interruption to their power supply, with up to 100,000 customers being impacted at any one time.

AEMO chief executive Audrey Zibelman said electricity distributors chose areas where demand was highest for load shedding, to achieve the maximum benefit of reduction in power use.

Victoria's Energy Minister Lily D'Ambrosio said most affected customers had their power interrupted for no more than an hour, but some parts of the state experienced outages of up to two hours.

Will people be compensated?

Ms D'Ambrosio said "typically" no compensation was made available when the market operator ordered power companies to load shed.

New infrastructure to improve reliability would come at a cost. ( AAP: Joe Castro )

Is our power system up to scratch?

Ms Zibelman said no country could afford "100 per cent reliability, over all hours and all circumstances".

Ariel Liebman, the deputy director of the Monash Energy Materials and Systems Institute (MEMSI) at Monash University, said while Friday's outages were unfortunate for those who experienced them, they were in fact a demonstration of the grid operating in the way it was designed.

"Outages are expected and in fact designed into the system according to a carefully considered formula trading cost versus reliability," he said.

He said the National Energy Market had a "reliability standard" which allowed 36,000 customers to be without power for an entire 24 hours, or 88,000 customers to be without power for 10 hours.

Associate professor Liebman said Friday's outage was well within this standard and "unless this happens more than 12 times in 2019 the system will have served its purpose".

Dylan McConnell, an energy analyst from the University of Melbourne's Climate and Energy College said greater investment in infrastructure would make the system less vulnerable to shortages following unexpected outages or natural disasters, but it came down to what people were prepared to pay for.

"If you wanted to have a power system that withstood [Friday's] conditions, and multiple outages at the coal-fired power stations, then you would have had to have a lot more infrastructure in place that we would have had to pay for, and it would be a lot more expensive for something that might only happen one year in 10," he said.

Hazelwood power station in Victoria's Latrobe Valley closed in March 2017. ( International Power Hazelwood )

Did the closure of the Hazelwood power station contribute to the situation?

Victorian Opposition Leader Michael O'Brien said on Friday Labor's policies had led to Hazelwood's closure, and the Coalition had warned this would leave the state exposed.

Hazelwood's closure in 2017 removed 1600 megawatts from Victoria's supply, but associate professor Liebman says this was an economic decision by its owners in a market that had more than enough power supply.

Mr McConnell said Hazelwood's closure had "not particularly" contributed to the power shortage in Victoria because the state had enough power without it, at least on paper.

He said were it not for the two unplanned outages at other Latrobe Valley plants, coupled with the extreme weather conditions, supply would have been sufficient.

"If you had a heatwave and one of those units failing, we would have been fine," he said.

"Or if we had two of the units failing, but it was not a heatwave, it would have been fine.

"The combination of all three meant that it was going to be a difficult day."

The Victorian Government wants half of the state's energy to come from renewable sources by 2030. ( Supplied: DP Energy/Tadgh Cullen )

Is this the new normal?

Mr McConnell said as the state's remaining coal-fired power plants get older, we should expect the kind of breakdowns seen this week to become more common.

Ms D'Ambrosio said most of the 1800 megawatts of power capacity lost in the state on Friday was due to infrastructure failures in the state's coal and gas-fired power stations.

She said Victorians needed to come to terms with the fact that the state's summers were getting longer and hotter.

"We have a 20th century energy system for a 21st century climate," she said.

Mr McConnell said while conditions like Friday's may become more frequent, authorities may develop more effective responses —for example through more accurate demand forecasting, or better planning of maintenance — to reduce the impact on consumers.

What can be done?

The Victorian Government has focused on encouraging more electricity generation from renewable sources such as solar and wind, promising to legislate to lift the state's renewable energy target to 50 per cent by 2030

Liam Wagner, a lecturer in economics at Griffith University, said investment in new transmission infrastructure between the states was needed, as well as greater use of renewables and battery storage, and improved energy efficiency.

Hugh Saddler, an honorary associate professor in the Crawford School of Public Policy at the Australian National University, said Friday's outages should prompt Victoria's electricity industry to put more effort into "demand response".

This means measures such as paying customers to allow authorities to turn off their air-conditioning compressors or pool pumps for short periods to reduce demand.

He said this would be a much lower-cost way of avoiding the need for load shedding than building new power plants, which may be needed for only a few hours a year, and never in some years.