Direct shaft power measurements of rotating machinery, including a magnetic encoding system for the shaft, having at least one conducting member having a first end and a second end which is disposed proximate the shaft with a gap between the member and the shaft. There is a pair of electrodes proximate each end of said conducting member, wherein the electrodes are electrically coupled to the shaft. One of the electrodes is electrically coupled to the second end of the conductor member. An encoding source is electrically coupled to the first end of the conducting member and electrically coupled to the other electrode, wherein unipolar current pulses from said encoding source are applied to the electrodes and the conducting member, thereby creating sectional encoded polarized magnetic regions in the shaft.