The increasing use of renewable energy technologies for electricity generation, many of which have an unpredictably intermittent nature, will inevitably lead to a greater demand for large-scale electricity storage schemes. For example, the expanding fraction of electricity produced by wind turbines will require either backup or storage capacity to cover extended periods of wind lull. This paper describes a recently proposed storage scheme, referred to here as Pumped Thermal Storage (PTS), and which is based on “sensible heat” storage in large thermal reservoirs. During the charging phase, the system effectively operates as a high temperature-ratio heat pump, extracting heat from a cold reservoir and delivering heat to a hot one. In the discharge phase the processes are reversed and it operates as a heat engine. The round-trip efficiency is limited only by process irreversibilities (as opposed to Second Law limitations on the coefficient of performance and the thermal efficiency of the heat pump and heat engine respectively). PTS is currently being developed in both France and England. In both cases, the schemes operate on the Joule-Brayton (gas turbine) cycle, using argon as the working fluid. However, the French scheme proposes the use of turbomachinery for compression and expansion, whereas for that being developed in England reciprocating devices are proposed. The current paper focuses on the impact of the various process irreversibilities on the thermodynamic round-trip efficiency of the scheme. Consideration is given to compression and expansion losses and pressure losses (in pipe-work, valves and thermal reservoirs); heat transfer related irreversibility in the thermal reservoirs is discussed but not included in the analysis. Results are presented demonstrating how the various loss parameters and operating conditions influence the overall performance.