**1. Introduction**

The Internet of Things (IoT) connects a multiplicity of devices to make life convenient. Smart grids constitute one implementation of IoT, and many countries have launched smart grids to develop integrated energy supply systems. A smart grid incorporates automation, bidirectional communication, and advanced sensor measurement systems to streamline interactions between the client and power supplier [1–4]. In contrast to traditional grids, smart grids enable power suppliers to distribute power efficiently and to control the use of power during a given period [5]. Furthermore, the data collected from a smart grid enable automatic billing.

The analysis of energy consumption data has many advantages for both consumers and suppliers: Consumers can track their energy usage, particularly as it varies with the seasons. Power suppliers can monitor how power is utilized across the distribution grid, which can help them formulate power management and energy-saving measures [6–8]. The establishment of advanced metering infrastructure (AMI) constitutes the first step to constructing such an intelligent power gird.

AMI is central to a smart grid system and enables the system to automatically monitor usage. **Figure 1** illustrates the architecture of a typical AMI, indicating that it comprises several concentrators and smart meters that are connected to a meter data management system (MDMS) [9]. The smart meters send data to the

concentrators, and the concentrators send the data to the MDMS. The AMI architecture requires high-quality and high-speed networks for providing stable service and efficient monitoring, and it comprises two such networks, namely a local area network (LAN) and wide area network (WAN). The LAN connects the concentrators and smart meters and leverages cutting-edge communication technologies such as power-line communication and the Zigbee specification. The WAN connects the concentrators and MDMS and constitutes the most important part of the AMI system; this network supports a host of high-speed technologies such as broadbandover-power-line technology, 3G, and long-term evolution [10].

Nonetheless, smart meters have a very large data frequency—with a small packet being generated every 15–60 min—that will exceed the capacity of existing communication technologies [11, 12]; this makes data difficult to transmit. Furthermore, smart grids face challenges in storing these large volumes of data. To solve these two problems, data size in both communication and storage should be reduced. This chapter introduces some novel approaches to doing so.
