This paper introduces the performance of a power leveling system with a 3.0-MJ, 9500-r/min flywheel energy storage. In term of the cost reduction, this system uses low cost flywheel and the general purpose products. Therefore, the time delay of the measurement device limits the control performance. In order to overcome this problem, the time delay compensation scheme based on Smith predictor is applied in the control in order to improve the control performance of the power regeneration. As a result, the overshoot of the regeneration power is eliminated by applying the compensation. In addition, the effectiveness of the power leveling control in a prototype is evaluated by experiment. As a result, it is confirmed that the power fluctuation is reduced by 84.6 %.