The new generation of smart substation puts forward higher requirements to sensing technology. Based on the needs of these requirements, four kinds of special optical fiber sensing technology in power systems were researched: all-optical current transformer, distributed temperature sensing technology, fiber grating vibration sensing technology and fiber Bragg grating sensing technology. These kinds of optical fiber sensing technology for the new generation of smart substation to enhance its performance were analyzed. Finally, based on the fiber Bragg grating sensing technology, the online oil and winding temperature monitoring system was constructed for the new generation of smart substation.