This paper describes the energy performance of an underground thermal energy storage system that consists of high efficiency heat pump and Borehole- Heat-Exchangers (BHE). The energy conservation concept of this system is operation of the heat pump at higher efficiency using the Water-Source-Heat- Pump (WSHP). For this concept, the seasonal storage system using BHE under the ground is adopted as a Borehole-Thermal-Energy-Storage-System (BTES) with high efficiency WSHP. It is expected to operate heat pump on advantageous temperature conditions rather than using ambient air as heat source or heat sink. This paper provides the simulation model and the energy analysis of various parameters such as heating and cooling load characteristic, borehole design, and operation system. A series of simulation was carried out for an office building in Japan. As the results it was made clear that BTES could decrease the energy consumption of the HVAC primary system about 20% compared with that of conventional system using Air-Source-Heat-Pump (ASHP).