The development and deployment of grid-scale energy storage technologies have increased recently and are expected to grow due to technology improvements and supporting policies. Energy storage systems can be utilized for various grid applications such as integrating more variable renewable energy into the grid and balancing differences between electricity supply and demand. While energy storage can help increase the penetration of renewables, reduce the consumption of fossil fuels, and increase the grid sustainability, its integration into the electric grid poses unique sustainability challenges that need to be investigated through systematic sustainability assessment frameworks. The main objective of this dissertation is to develop principles and models to assess the environmental and economic impacts of grid-scale energy storage and guide its development and deployment. A wide range of energy storage systems including batteries, pumped-hydro energy storage (PHES), compressed air energy storage (CAES), and grid applications ranging from frequency regulation to energy time-shifting are studied in this dissertation to investigate and understand the influence of storage technology characteristics, the grid application performance requirements, and the electric grid profile on environmental and economic outcomes.