This paper proposes a flywheel energy storage system for several 100 MVA. It is capable of dynamic active and reactive power control to stabilize the grid. The flywheel energy storage system consists of an electric drive with Doubly Fed Induction Generator and Modular Multilevel Matrix Converter. The authors discuss the negative effect of stator harmonics in this application and give a solution by using a resonant harmonic current control approach. This algorithm is verified on a downscaled 10 kVA test bench.