Wireless communication technologies bring numerous benefits for smart grid applications including lower cost, more flexibility, easier installation, etc. In this paper, the performance of wireless local area network (WLAN) under impulse electromagnetic interference (EMI) in a substation is evaluated. Simulation results have demonstrated that the impulsive EMI causes more severe degradations compared with additive white Gaussian noise (AWGN), especially when the signal to interference plus noise ratio (SINR) is high. Although multiple-antenna based diversity schemes achieve better performance than the single-antenna scheme, the diversity gain is not sufficient to compensate for the performance loss caused by the impulsive EMI. Therefore, how to mitigate the impulsive EMI is essential for deploying WLAN systems in a substation. This paper also summarized conventional interference mitigation techniques, and their adaptability to the impulsive EMI. The analysis provides an insight to future research.