Hundreds of firefighters are tackling bush fires in the state of Victoria
South-eastern Australia is experiencing its worst heatwave in decades, with temperatures in excess of 43C (109F).
Health officials in South Australia say the searing heat may be to blame for an apparent increase in the number of sudden deaths among the elderly.
In neighbouring Victoria state, bush fires have destroyed at least 10 homes.
Nearly 500,000 people in the state are reported to have lost their power supplies, following severe pressure on the electricity grid.
An explosion was also reported at a substation in Melbourne, Australia's second-largest city.
"It is an extreme week. The system is not made to operate where you've got temperatures in the suburbs of 46C," said the head of Victoria state, John Brumby.
Commuters are facing long delays after the blackouts added to the problems on the rail network. Hundreds of train services were cancelled after the heat buckled tracks.
The heatwave in Victoria is being described as the region's worst since 1908.
Wildfires in the west of the state have destroyed 2,000 hectares (4,900 acres) of forest and grassland, forcing residents to flee their homes, emergency workers said.
"The whole area's just covered in smoke. You can feel the heat from the fire and I'm probably about a kilometre (0.6 miles) away," local resident Keith Holmes told ABC news.
Police in South Australia reported a surge in sudden deaths, with 19 people dying on Friday in the state capital Adelaide, 14 of whom were elderly.
South Australia's Health Minister John Hill said: "You've got to draw the conclusion that a lot of them have something related to the effects of heat."
In the southern island state of Tasmania, temperatures passed 40C for the second day in a row on Friday - only the second time in its recorded history.
BBC weather experts say the heatwave is being caused by an area of high pressure centred off the coast near Sydney, which is drawing hot and dry air south from Australia's interior.
The heatwave is expected to last several days, with the high pressure gradually moving away to the south, which will draw cooler and moister air in from the Pacific.
The average temperature in Melbourne at this time of year is 25.8C (78F).