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We have designed a micro flywheel energy storage system in which the flywheel stores electrical energy in terms of kinetic energy and converts this kinetic energy into electrical energy when necessary. The flywheel is supported by two radial permanent magnet passive bearings. Permanent magnet passive bearings use the repulsive forces between two sets of permanent magnets so that contact free rotation is possible. A set of voice coil actuator provides the axial stability, resulting in a complete magnetic levitation. The toroidally-wound BLDC motor which has high efficiency and little additional negative radial stiffness is used for motoring and generation. Micro flywheel energy storage system is optimally designed to have the maximum energy storage capacity. In this paper, we present the design equation for the components in a micro flywheel energy storage system and the optimal design process for these components..