Economic,　technology　and　environmental　incentives　are　changing　the　features　of　electricity　generation　and　transmission.　Centralized　power　systems　are　giving　way　to　local　scale　distributed　generations.　At　present,　there　is　a　need　to　assess　the　effects　of　large　numbers　of　distributed　generators　and　shortterm　storage　in　Microgrid.　A　Matlab/Simulink　based　flywheel　energy　storage　model　will　be　presented　in　details.　The　corresponding　control　philosophy　has　been　well　studied.　Simulation　results　show　the　accurate　dynamic　behavior　of　flywheel　unit　during　charge　and　discharge　modes.　The　flywheel　unit　is　fully　compatible　with　the　existing　Microgrid　testbed.　©　2010　IEEE.