With the rapid development of information technology, the digital transformation of the power system is accelerating. However, the risk of data privacy leakage is also becoming increasingly apparent in this process, posing a huge challenge to the security management of the power system. This study adopted homomorphic encryption technology to address this challenge by designing and implementing an encryption framework specifically designed for power system data. Firstly, the basic principles and key characteristics of homomorphic encryption technology were introduced, and how to apply this technology in the data processing and transmission process of the power system was explained in detail to ensure that data can still be effectively processed and analyzed in a fully encrypted state. In addition, this study also verified the performance and security of the encryption framework in actual power system environments through a series of experiments. Whether it is brute force cracking attempts against 128 bit or 256 bit key lengths, the BGV (Brakerski-Gentry-Vaikuntanathan) algorithm can maintain the security of encrypted data without any cracking incidents. The research results indicated that homomorphic encryption can not only effectively prevent the leakage of sensitive data during processing, but also enhance data security protection without sacrificing operational efficiency. In summary, the application of this technology not only enhances the security of data processing in the power system, but also provides strong technical support for the digital transformation of the power system, which has important theoretical and practical application value.