A robust communication infrastructure is the touchstone of a smart grid that differentiates it from the conventional electrical grid by transforming it into an intelligent and adaptive energy delivery network. To cope with the rising penetration of renewable energy sources and expected widespread adoption of electric vehicles, the future smart grid needs to implement efficient monitoring and control technologies to improve its operational efficiency. However, the legacy communication infrastructures in the existing grid are quite insufficient, if not incapable of meeting the diverse communication requirements of the smart grid. Therefore, utilities from all over the world are now facing the key challenge of finding the most appropriate technology that can satisfy their future communication needs. In order to properly assess the vast landscape of available communication technologies, architectures and protocols, it is very important to acquire detailed knowledge about the current and prospective applications of the smart grid. With a view to addressing this critical issue, this paper offers an in depth review on the application characteristics and traffic requirements of several emerging smart grid applications and highlights some of the key research challenges present in this arena.