Electric demand is steadily increasing, hence requiring continuous investments in modernizing, and expanding power grids worldwide. Traditionally, power system planning projects have considered minimizing the costs of capacity expansion and minimizing the amount of energy not served as the main objectives. With climate change policies enforcing the decommissioning of fossil-fuel-based generation, new clean and renewable generation technologies are being considered for power system capacity expansion projects. However, the environmental impacts of energy resources are not limited to carbon emissions and their contribution to global warming. In fact, every power generation technology can result in undesired impacts during its entire life cycle, which could negatively affect air quality, water resources, material resources, and/or human health. This paper provides an overview of how to assess the sustainability of power systems and power generation technologies based on life cycle assessment (LCA). A review of LCA, as applied to power systems and generation technologies, is presented with a discussion of general findings, challenges, and limitations. A review of the literature is then provided related to how sustainability objectives are currently incorporated in power grid design and capacity expansion models. Finally, shortcomings of the current models are discussed, along with opportunities for future research.