Abstract: A thermal energy storage system in which at least one vertically extending cavity is formed within ground constituted by geologically stable consolidated rock, and at least one cylindrical steel vessel having a diametral dimension smaller than its longitudinal dimension is positioned within the cavity and surrounded peripherally by a containment material. Conduits are provided for directing pressurised water in vapour and/or liquid phase into the vessel and for conveying steam from an upper region of the vessel. The vessel has a peripheral wall acting as a liner for the containment material and internal pressure-induced forces are transferred from the vessel to the containment material via the peripheral wall. The containment material in one embodiment of the invention includes the surrounding rock. In a further embodiment the containment material includes a filler material and the internal pressure induced forces are transferred from the vessel to the surrounding rock via the filler material.