Research on digital communication systems has been greatly developed in the past few years and offers a high quality of transmission in both wired and wireless communication environments. Coupled with advances in new modulation techniques, Orthogonal Frequency Division Multiplexing (OFDM) is a well-known digital multicarrier communication technique and one of the best methods of digital data transmission over a limited bandwidth . In this paper, design and analysis of OFDM system for powerline based communication is proposed. In doing so, MATLAB and embedded Digital Signal Processing (DSP) systems are used to simulate the operation of virtual transmitter and receiver. The performance of the system design is then analysed by adding noise (additive white Gaussian noise, Powerline coloured background noise and Middleton Class A noise) in an attempt to corrupt the signal. In this paper results will show that performance is improved by using lower order modulation formats e.g. Binary Phase Shift Keying (BPSK), QPSK, etc. compared to the higher modulation schemes e.g. 64 Quadrature Amplitude Modulation (QAM); as they offer lower data rates but are more robust in the presence of noise. The performance study of OFDM scheme is also examined with and without presence of noise and application of forward error correction (FEC).