Stratified water storage (SWS) is of high energy efficiency, but of low energy density as it relies on the sensible heat of water. Latent heat thermal energy storage (LHTES) system using phase change material (PCM) is of higher energy density, and might be an alternative to the bulky SWS system. However, the utilization of latent heat in PCM has been hindered by the low thermal conductivity of PCM. Previous research has demonstrated that high thermal conductivity components, such as metal foam, can be used to enhance the effective thermal conductivity of PCM, k(eff). In this work, we proposed an index of effective energy storage ratio, E-st to characterize the effective energy storage capacity of an LHTES system with reference to an ideal SWS system of the same volume. A conjugate numerical fluid flow and heat transfer method was first validated and then used to characterize the E-st of a tube-in-tank design. The effect of k(eff) on E-st was demonstrated. It is shown that there is an optimum compactness factor (CF) for PCM at any finite k(eff), and that the optimum CF and the corresponding maximum E-st are higher for PCM at a higher k(eff). It is also shown that, even at the optimal CF for PCM at any k(eff), quite a percentage of the theoretical energy storage capacity is not utilized, indicating that heat transfer enhancement in the fluid side may further improve the E-st. This analysis provides implications on an optimal design of LHTES systems. (C) 2017 Elsevier B.V. All rights reserved.