In a Borehole Thermal Energy Storage (BTES) system, heat is extracted from or injected to the subsurface, taking advantage of the relatively constant temperatures of the underground. Both thermal conduction and advection can influence the performance of BTES systems, but thermal advection is often neglected in the design process. However, in areas with groundwater flow, the heat exchange between the BTES system and the soil can be significantly affected, as the stored heat is transported from the borehole with the flow. This project studies the influence of groundwater flow on the performance of a BTES system. A detailed 3D numerical model is created using MODFLOW and MT3D to simulate groundwater flow and heat transfer under various conditions. The model is verified using an analytical solution as well as experimental data, and is subsequently used to perform a sensitivity analysis and simulate a case study, in order to gain insight on the influence of groundwater flow on the heat exchange process and the conditions that favor this effect. The results reveal that groundwater flow is enhancing the heat exchange rates both in heating and in cooling mode. The magnitude of the effect depends on the total groundwater discharge, and the porosity and background temperature of the soil. In cases of combined heating and cooling, the effect also depends on the magnitude and ratio of the injected and extracted energy loads, as well as the frequency of switching between storage and extraction. Finally, it is revealed that groundwater flow is beneficial for systems with unbalanced energy loads, as it counterbalances the net heat extraction or injection that could decrease the system’s heat exchange capacity in the long term.