Recent developments in communication media and networking technology have offered a wide range of new opportunities for utilities to improve their electric systems, operations, and process automation. The Intelligent Electronic Devices (IEDs), communication protocols, and communication methods work together as a system to perform power system automation. The paper discusses the evaluation of IEC 61850 communication protocol, the standard for ‘“Communication Networks and Systems in power utility automation” in designing modern digital substation automation systems. Based on a detailed literature survey, the key technical features, major benefits, as well as technical challenges related to the IEC 61850 standard in substation automation are also presented in this paper.