In flywheel based energy storage systems (FESSs), a flywheel stores mechanical energy that interchanges in form of electrical energy by means of an electrical machine with a bidirectional power converter. FESSs are suitable whenever numerous charge and discharge cycles (hundred of thousands) are needed with medium to high power (kW to MW) during short-time periods (seconds–minutes). Monitoring of the FESS state of charge is simple and reliable as only the spinning speed is needed. The materials for the flywheel, the type of electrical machine, the type of bearings and the confinement atmosphere which all together determine the FESSs energy efficiency (>85%) are reviewed. Main FESS applications: power quality, traction and aerospace are presented. Additionally in this paper it is presented the simulation of an isolated wind power system (IWPS) consisting of a wind turbine generator (WTG), a consumer load, a synchronous machine (SM) and a FESS. A low-speed iron flywheel driven by an asynchronous machine (ASM) is sized for the presented IWPS. The simulation results with graphs for system frequency, system voltage, active powers of the different elements, and FESS-ASM speed, direct and quadrature currents are presented showing that the FESS effectively smoothes the wind power and consumer load variations.