In this study, a flywheel energy storage system (FESS) has been designed for smart grid applications. The requirements of the flywheel and electrical machine, which are the most important parts of FESS, have been determined. Analytical solutions approach has been performed for the flywheel with a capacity of 40 kWh. A high-speed permanent magnetassisted synchronous reluctance machine (PMaSynRM) has been designed with Ansys Motor-Cad to meet the requirements of system. The torque-speed-power graph, thermal situation, magnetic flux lines, efficiency map, power map, and power factor map of FESS were analysed and obtained using the finite element method. Analyses were performed using Ansys Maxwell and the Machine Toolkit plugin. The results showed that the designed FESS offers high efficiency, high speed, and high energy storage capacity to be used in the smart grid applications.