The thermodynamic performance of an encapsulated ice thermal energy storage (ITES) system for cooling capacity is assessed using exergy and energy analyses. A full cycle, with charging, storing, and discharging stages, is considered. The results demonstrate how exergy analysis provides a more realistic and meaningful assessment than the move conventional energy analysis of the efficiency and performance of an ITES system. The overall energy and exergy efficiencies are 99.5 and 50.9 percent, respectively. The average exergy efficiencies for the charging, discharging, and storing periods are 86, 60, and over 99 percent, respectively, while the average energy efficiency for each of these periods exceeds 99 percent. These results indicate that energy analysis leads to misleadingly optimistic statements of ITES efficiency. The results should prove useful to engineers and designers seeking to improve and optimize ITES systems. [S0195-0738(00)00904-3].