In addition to plunging the area into darkness, the Wednesday night bombardment also knocked out power to hospitals and clinics.
Sameh Hassan, a witness who could see the power station from his home, said: "After the initial bombing of the station, Palestinian firefighters managed to put out the blaze.
"Then the station was struck again.
"Every time they found the firemen had put out the fire, they repeated their bombing runs," Hassan said.
Israeli warplanes targeted sites in Gaza as a show of force ahead of its incursion into the Gaza Strip to retrieve an Israeli soldier captured at the Kerem Shalom crossing in southern Gaza on Sunday.
But the loss of electric power means many Palestinians will be unable to access medical care dependent on an energy source.
Khalid Radi, the spokesman of the ministry of health, told Aljazeera.net: "Al-Shifaa hospital, the main and largest hospital in the Gaza Strip and many clinics in the Strip are now without power which will result in a shortage of generated oxygen.
"In addition, the loss of power will also adversely affect kidney patients whose dialysis and other equipment run on electricity only."
Palestinian doctors will be unable to perform critical surgery and other operations.
Huda Saady, a kidney patient at Al-Shifaa told Aljazeera.net: "I wash my kidney two times a week. I can't skip one week without washing according to the doctors' prescription."
Raji al-Sorani, director of the Palestinian Centre for Human Rights, says the targeting of the power station is tantamount to collective punishment for all who live in Gaza.
"It is a violation of the first, second and third articles of the Geneva Conventions. However, targeting the infrastructure isn't a way to free the Israeli soldier, but to topple the Hamas government."
Other rights activists say that power loss will likely lead to the spoiling of foods in refrigerated warehouses and in civilian homes, particularly as temperatures continue to rise in the summer months.
Restoring power is expected to take six months. The power cut is also affecting water supplies which use electricity to pump water.
Khalil Abu-Shamaleh, director of Al-Dameer Human Rights Centre, said in a news conference in Gaza on Thursday: "Targeting the infrastructure is habitual for the Israelis.
"The concept of security in the Israeli mind has been known since the beginning of the occupation until these days; uprooting trees, demolishing homes and destroying infrastructure under the pretext of keeping security."