In traditional wind turbines employing gearboxes, the blades spin a shaft that is connected through a gearbox to the generator. The multiple wheels and bearings in a gearbox are subjected to severe stresses because of wind turbulence and any defect/failure in a single component of the gear system can bring the wind turbine to a halt. The main hypothesis in this work is that the typical generator- gear solution in the wind industry can be replaced by a low speed permanent magnet generator using direct drive wind turbines. In this thesis, development of direct-drive wind energy systems is reviewed where the gearbox is completely eliminated. This work discusses the failure rates and downtime of the subassemblies in a wind turbine and evaluates the contribution of the gearbox towards the same. Analysis in terms of estimated parameters is performed to assess the improvement in reliability obtained with direct drive turbines. Weight and economic comparisons are also discussed briefly for the direct drive and geared turbines.