Electricity has returned to most of Spain and Portugal but with continued disruptions on the second day after an unknown failure caused a massive blackout across much of western Europe.

The hunt has begun for the cause of a massive blackout across Spain, Portugal and parts of France that halted trains, bank machines and traffic lights, in one of Europe's biggest ever power system collapses.

That conclusion has been supported by the operator of Spain’s national grid, Red Eléctrica, which has located where outages began on Monday. Two separate incidents of power outages led to instability in the grid leading to a “breakdown in interconnections with France,” leaving the Iberian grid isolated.