Residents of Andorra and parts of France bordering Spain were also reporting being hit by the blackout. Further outages have been reported as far as Belgium, according to the latest information.
The electricity service has since been restored in France after some areas suffered a partial outage, sources from the national grid manager RTE said, as quoted by the Spanish news agency Efe.
The sources added that RTE is exploring ways to relocate the electricity to help reconnect Spain. The Basque Country has also had its power restored, according to reports.
By Monday afternoon, Red Eléctrica stated that it had begun gradually restoring power in both the north and south of Spain. However, the process of getting everyone back on the grid might take some time for technical reasons, it added.
According to Red Eléctrica, electricity consumption across Spain dropped by 50% at around 12:30 pm on Monday, indicating the widespread scale of the blackout.
The cause is yet unclear. Spain's two major electric companies, Endesa and Iberdrola, are investigating the incident.
Domestic media are reporting issues with the European electric grid, which affected national grids in the Iberian Peninsula, however.
A fire in the south-west of France, on the Alaric mountain, which damaged a high-voltage power line between Perpignan and eastern Narbonne, has also been identified as a possible cause, Portugal's national electric company REN said.
"Such a widespread grid failure is extremely unusual and could be caused by a number of things: there could be a physical fault in the grid which brings down power, a coordinated cyber attack could be behind it, or a dramatic imbalance between demand and supply has tipped the grid system over the edge," Taco Engelaar, managing director at energy infrastructure.
"If it's a system fault, then the interconnectivity between different regional and national grids could be leading to the large footprint of outages we're seeing today," he added.
"The same goes for a cyber attack - lots of these systems are connected and share assets - taking down one could take down many."
