The development of cost effective flywheel energy storage technology is proposed. Flywheel energy storage is an important candidate technology for application in electric drive vehicles, especially in hybrid electric vehicles, and in stationary applications including uninterruptible power supplies, distributed energy storage, and off-grid power systems as potentially used in the developing world. The distinguishing advantage of flywheel energy storage with respect to the alternatives is its combination of very high power density along with its moderate to respectively high energy density. One scheme for realizing a low-cost flywheel energy storage system, to be investigated, relies on the use of a single high-strength ferromagnetic steel structural member that suffices as both the energy storage rotor and the integrated rotor of an appropriately dimensioned motor/alternator. As outlined in the proposal, such a scheme can result in a functional and cost effective high-power electrical energy storage reservoir. The main focus of the research will be on the design, fabrication, and test of prototype hardware to prove out this concept. The effort will focus on the design of this integrated motor/alternator, and on the design of a suitable active magnetic bearing system for this application. In particular, an active magnetic bearing that incorporates self-sensing where the bearing control windings are also effectively used for sensing is proposed. Existing active magnetic bearings suffer from complexity due to the need to incorporate separate dedicated position sensing devices, along with the required support hardware and power. A consequence is in high cost and compromised reliability of these magnetic bearing systems.