We investigate the dynamic thermal performance of a molten-salt packed-bed thermal energy storage (TES) system using capsules filled with high-temperature phase change material (PCM), which is identified as a promising low-cost TES system for concentrating solar power (CSP) plants. A transient two-dimensional dispersion-concentric (D-C) model is modified to account for the phase change process within capsules so as to determine the temperature distribution and phase change front within each capsule. Using the model, detailed characteristics of heat transfer between molten salt and the packed PCM capsules are investigated, and a parametric sensitivity analysis is provided. During the discharging process, different variation trends are found for the capsule temperature due to the existence of the isothermal solidification process. As a result, generally there exists a quasi-isothermal region and two thermocline regions for the molten-salt temperature along the tank height, and the molten-salt temperature at the outlet also shows a quasi-isothermal period, during which the molten-salt outlet temperature is very close to the phase change temperature (PCT) of PCM. It is also found that the effective discharging efficiency of the system can be increased by increasing the PCT, decreasing the molten-salt inlet velocity or decreasing the capsule diameter. These results provide suggestions to optimize the design and operational parameters for the system within practical constrains. (C) 2014 Elsevier Ltd. All rights reserved.