State-owned Hydro Tasmania has announced a record profit.

The before-tax profit of $238 million is more than double last year's result.

The company will pay $166 million to the Tasmanian Government and invest the rest in upgrading infrastructure.

But the outlook is not as positive.

Hydro predicts uncertainty in the years ahead because of the Federal Government's plans to repeal of the carbon tax.

It is also expecting a drop in electricity demand.