As one of the divisions in China Southern Power Grid, Yunnan Power Grid Corporation has conducted research and demonstration projects on multiple smart grid technologies to improve the power system reliability, save operation cost and enhance measurement accuracy. In this paper, we will introduce The Study of Yunnan Mountain Substation Data Aggregation Technology based on Sparse Methods. Most substations are built in the mountain, the complex geological conditions and poor natural conditions put forward higher requirements on the substation running and real-time comprehensive monitoring of substation system. Processing and polymerization research of large amounts of the monitoring data and information is studied in this article. This paper introduces the sparse methods and then explains the thinning algorithm, especially new algorithm is proposed. Finally, the substation sparse method architecture is put forward and the simulation experiment was carried out to prove the feasibility and effectiveness of the proposed method.