The paper presents a physical (PHY) layer simulation of the low voltage powerline communication (LV PLC) system in accordance with the PRIME standard. The simulation concept is based on the transmission line and two port network theory. The simulator PrimeSim is implemented within the Matlab and introduces a graphical user interface for the network setup and results management. Furthermore, the simulator represents a generic framework for the development of broad spectrum of powerline network simulators and investigation of the applicability of PLC technology for smart grid applications. Performance of the PrimeSim simulator was validated in the pre-built LV PLC network consisting of eight nodes. Results for the probability of the bit error obtained within the simulation represents a good match of those obtained measurement within test network.