Firefighters were called to a home on Allan Street about 6pm on Thursday afternoon after a fire started in a rear shed.

About 20 firefighters spent two-and-a-half hours battling the blaze, which destroyed the structure and the tools inside.

Fire and Rescue NSW Inspector Frank Finlay said the cause was unclear.

"There were no injuries but it was very unfortunate for the owner," he said.

"There were items like chainsaws, bench saws, drills and shed tools inside.

"He also had a stack of firewood that caught alight which took a lot of cooling before it could be rendered safe."

Four fire trucks were deployed to the scene.

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The crews tackled the fire from the front of the home, and sprayed water from an adjoining property on Daniel Street.

A large number of neighbours watched on.

The iron shed, which measured 10 by six metres, was badly damaged.

Inspector Finlay said smoke could be seen from a long distance.

"Being that it's a shed, there were a lot of fuels inside," he said.

"The fire was very hot.

"It put off a lot of smoke.

"We were unable to determine the cause."

While the fire crews were responding, a lightning strike destroyed a power box on Logan Road.

The incident caused a power blackout to homes in the area for several hours.

Firefighters also responded to two car blazes on Thursday night, during a high fire danger period with total fire bans.

A vehicle was destroyed after being dumped in a drain in parkland off Union Road in Lavington, and set on fire.

It was towed from the scene.

And another car was set on fire and destroyed on Waratah Way in West Albury about 11pm.

One brigade attended the scene and brought the incident under control.