The integration of renewable energy and the optimization of energy use are crucial components of sustainable energy transitions aimed at mitigating climate change. Modern technology, notably the Internet of Things (IoT), offers a myriad of applications within the energy sector, spanning energy supply, transmission and distribution, and demand. IoT holds the potential to enhance energy efficiency, boost the share of renewable energy sources, and reduce the environmental impact of energy consumption. This review article synthesizes existing literature on IoT applications in Hydelenergy systems, with a particular focus on smart grids. Furthermore, it delves into the enabling technologies of IoT, including cloud computing and data analysis platforms. Challenges in deploying IoT in the energy sector, such as privacy and security concerns, are also addressed, with proposed solutions like blockchain technology. This review serves as a comprehensive resource for energy policymakers, economists, and managers, providing insights into IoT’s role in optimizing policymakers, economists, and managers, providing insights into IoT’s role in optimizing energy systems.