Asynchronous motor drives are often better without a rotational speed sensor because removing the encoder or resolver gets rid of one of the weakest and most troublesome elements of the whole drive system, while modern control algorithms can usually estimate speed with sufficient accuracy for most applications. A shaft encoder or resolver is a delicate device mounted on the motor shaft, exposed to heat, vibration, dust, moisture and electrical noise. It needs precise mechanical mounting, alignment, extra cabling and connectors, and it ages or fails much faster than the motor itself. In many industrial and marine installations, unplanned stoppages are caused more by damaged encoders or their cables than by real motor failures. Another issue connected with sensorless operation is a flying start (also called flying restart, spin-catch or catch-on-the-fly) which is a special function of an inverter drive that allows it to safely take control of an induction machine that is already rotating, instead of assuming the motor is at standstill. With flying start mode enabled, the drive first looks for the actual speed and direction of the motor before it builds up torque. In practice, it reconnects to the motor with a special search routine: it applies a small voltage pattern, measures the resulting currents and the back EMF, and from these signals estimates the rotating magnetic field and thus the motor’s speed and direction. Once it has locked onto the rotor flux, it adjusts its output frequency and phase so that the stator field “catches” the spinning rotor smoothly. After that, it ramps the speed to the reference value just like in normal operation. The asynchronous generator needs an upgrade in comparison to drive mode of operation which means that startup conditions differ than this used in the motoring mode. This article presents original method of sensorless rotational speed determination and excitement process with use of machine state observer.