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We are investigating the use of flywheels for energy storage. Flywheel devices need to be of high efficiency and an important source of losses is the bearings. In addition, the requirement is for the devices to have long lifetimes with minimal or no maintenance. Conventional rolling element bearings can and have been used, but a noncontact bearing, such as a superconducting magnetic bearing, is expected to have a longer lifetime and lower losses. We have constructed a flywheel system. Designed to run in vacuum this incorporates a 40 kg flywheel supported on superconducting magnetic bearings. The production device will be a 5 kW device storing 5 kWh of retrievable energy at 50000 rpm. The Cambridge University system is being developed in parallel with a similar device supported on a conventional bearing. This will allow direct performance comparisons. Although superconducting bearings are increasingly well understood, of major importance are the cryogenics and special attention is being paid to methods of packaging and insulating the superconductors to cut down radiation losses. The work reported here is part of a three-year program of work supported by the EPSRC.