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This paper presents the modeling and motion-sensorless direct torque and flux control of a novel dual-airgap axial-flux permanent-magnet machine optimized for use in flywheel energy storage system (FESS) applications. Independent closed-loop torque and stator flux regulation are performed in the stator flux ( x-y) reference frame via two PI controllers. This facilitates fast torque dynamics, which is critical as far as energy charging/discharging in the FESS is concerned. As FESS applications demand high-speed operation, a new field-weakening algorithm is proposed in this paper. Flux weakening is achieved autonomously once the y-axis voltage exceeds the available inverter voltage. An inherently speed sensorless stator flux observer immune to stator resistance variations and dc-offset effects is also proposed for accurate flux and speed estimation. The proposed observer eliminates the rotary encoder, which in turn reduces the overall weight and cost of the system while improving its reliability. The effectiveness of the proposed control scheme has been verified by simulations and experiments on a machine prototype.