Wind-Diesel Hybrid power generation is a viable alternative for generating continuous power to isolated power system areas which have inconsistent but potential wind power. The unpredictable nature of variable power from Wind generator to the system is compensated by Diesel generator, which supplies the deficit in generated power from wind to meet the instantaneous system load. However, one of the major challenges for such a system is the higher probability of transients in the form of wind and load fluctuations. This paper analyses the application of Flywheel Energy storage system (FESS) to meet the transients during wind-speed and load fluctuations around high wind operation. The power system architecture, the distributed control mechanism governing the flow of power transfer and the modelling of major system components has been discussed and the system performances have been validated using MATLAB/Simulink software. Two cases of transient stages around the high wind system operation are discussed. The simulation results highlight the effective usage of FESS in reducing the peak overshoot of active power transients, smoothes the active power curves and helps in reducing the diesel consumption during the flywheel discharge period, without affecting the continuous power supply for meeting the instantaneous load demand. © School of Engineering, Taylor’s University.