In Saudi Arabia, the growth of demand for electrical energy in the rapidly expanding towns, cities and industries, far exceeds the growth of the power bring made available. Recently the Saudi Consolidated Electric Companies (SCECO) are facing a shortage of electricity during the summer period mainly due to the high consumption of electricity in the air conditioning sector, The incorporation of thermal energy storage (TES) technologies with a conventional air conditioning system is found to be an appropriate solution for energy-demand management. In this paper an introductory overview of thermal storage air conditioning is presented, comparing phase change (e.g. ice) and sensible heat (e.g. chilled water) storage technologies. The pros and cons of each are evaluated. The suitability of TES technology for the Saudi HVAC (heating, ventilating and air conditioning) industry is explored with the benefits to the owner such as: reduced energy consumption; less operation and maintenance costs; and downsizing of the chiller plant and system for new facility; alternative to new chiller installation to cater for increased cooling load; and stored water as a fire protection source. Furthermore, an economic study has been presented to illustrate the feasibility of TES based air conditioning in Saudi Arabia.