Residents cheered as power was restored following an outage in Spain on Monday afternoon.

Footage shows locals shouting with joy in the streets as lights flickered back on across Madrid on the evening of April 28.

Officials said the electricity cut was part of a major grid failure that impacted large parts of Spain and Portugal.

The country declared a state of emergency. More than 30,000 police officers were deployed to deal with the mayhem caused by the power failure.

Spain's reliance on solar and wind was said to have exacerbated the power cuts because the renewables can make the grid less stable.

By early Tuesday, power had been restored to nearly 90 per cent of mainland Spain, with lights also returning in Madrid and Portugal's capital, Lisbon.

At least four people reportedly died during the massive outage.

An elderly couple and their son were allegedly found dead at their home in Ourense from carbon monoxide poisoning after using a generator during the blackout.

A woman also died Monday night after a fire, believed to have been caused by a candle, engulfed her apartment in Madrid.