In micro-grid systems, wind turbines are essential power generation sources. The direct-driven surface-mounted permanent-magnet synchronous generators (SMPMSGs) in variable-speed wind generation systems (VS-WGSs) are promising due to their high efficiency/power density and the avoidance of using a gearbox, i.e., regular maintenance and noise are averted. Usually, the main goal of the control system for SMPMSGs is to extract the maximum available power from the wind turbine. To do so, the rotor position/speed of the SMPMSG must be known. Those signals are obtained by the help of an incremental encoder or speed transducer. However, the system reliability is remarkably reduced due to the high failure rate of these mechanical sensors. To avoid this problem, this paper presents a model reference adaptive system with finite-set (MRAS-FS) observer for encoderless control of SMPMSGs in VS-WGSs. The motif of the presented MRAS-FS observer is taken from the direct-model predictive control (DMPC) principle, where a certain number of rotor position angles are utilized to estimate the stator flux of the SMPMSG. Subsequently, a new optimization criterion (also called quality or cost function) is formulated to select the best rotor position angle based on minimizing the error between the estimated and reference value of the stator flux. Accordingly, the traditional fixed-gain proportional-integral regulator generally employed in the classical MRAS observers is not needed. The proposed MRAS-FS observer is validated experimentally, and its estimation response has been compared with the conventional MRAS observer under different conditions. In addition to that, the robustness of the MRAS-FS observer is tested at mismatches in the parameters of the SMPMSG.