In the quest of an efficient smart energy management system that can fulfill the power demand of consumers, researchers are focusing on smart power system which can integrate both conventional and renewable energy resources as well as production of clean energy. As a result, the concept of Internet of Energy (IoE) is developed which is similar to the perception of Internet of Things (IoT), which supports both energy and information flow. In this study, a systematic review of the current state-of-the-art of IoE and IEC 61850 has been presented, and it has identified the research gaps and opportunities for future development. The discussion unfolds by illuminating the evolution of smart grids and IoE, shedding light on the benefits and challenges inherent in employing IEC 61850 as a communication standard for IoE. Moreover, the potential application of IEC 61850 standard for enabling IoE in smart grids has been explored. Besides reviewing the trends and challenges of IoE and its key technologies, such as energy routers, power generation equipment, and energy storage devices; it also discussed how the IEC 61850 standard can facilitate the communication and interoperability among these technologies and provide a robust and flexible platform for the IoE. The outcome of this study show that IEC 61850 has a wide range of applicability and suitability for IoE, as it can support various functions and features of IoE, such as information modeling, data exchange, plug-and-play, fault detection, and intelligent control. This study also presents some examples of IEC 61850 based IoE systems, such as energy routers, wind and solar power plants, battery storage systems, and vehicle-to-grid systems. The comparison of this study with the equivalent studies shows that this study provides a comprehensive and up-to-date overview of IoE and IEC 61850, and covers a wide range of topics and aspects of IoE and IEC 61850. This study also provides a critical evaluation of the strengths and weaknesses of IEC 61850 for IoE, and proposes some directions for future research and development.