Fine-grained multiple dimensional monitoring and control of power infrastructures enables the scale of network traffic to grow at an exponential way in smart grid. However, bandwidth remains a constrained resource which is infeasible to provision at liberty in IEC61850 based substation. Motivated by the observation that it is important to allocate appropriate bandwidth for each terminal device according to the whole network states and service priority, we propose a novel dynamic bandwidth allocation scheme, which is based on software defined networks (SDN) and IEC61850 to guarantee high bandwidth utilization in substation networks. In the proposed scheme, network elements are interconnected and interoperated with power infrastructures seamlessly through the general abstract communication service interfaces (ACSI). Moreover, a modified SDN controller is designated to monitor and control states of both station-level network and process-level, in which dynamic bandwidth allocation policy are formulated to ACSI services. On one hand, the controller serves for diverse applications of Intelligence Electric Devices (IEDs) autonomously. On the other hand, every IED needs to report its bandwidth requirements to controller. Besides, an efficient communication mechanism is also proposed for information exchange between IEDs and modified controller. Therefore, bandwidth for each traffic flow can be configured according to the whole network states in real time. Moreover, traffic flows can be forwarded through multiple routing paths. To evaluate the performance of proposed scheme, bandwidth utilization of MMS, GOOSE and SAV communications are simulated. Simulation results show bandwidth utilization for MMS, GOOSE and SAV is improved significantly.