Methods are discussed to estimate energy transfer from the solar wind to the magnetosphere during substorm growth phases. Observational and modeling constraints are then used to assess quantitatively the total amount of energy stored in the magnetotail. The major avenues of energy dissipation are examined and the energy that is released in the form of plasma sheet heating, ionospheric Joule heating, plasmoids, and energetic particle production during substorms is assessed. Energy sources are evaluated to drive substorm evolution in a particularly well-observed case: stored tail-lobe energy is sufficient to drive observed substorm dissipation processes (by large margins). On the other hand, energy in the closed field lines of the plasma sheet is insufficient to supply the substorm energy. Hence, magnetic reconnection is required on energy grounds during well-observed substorm cases. (C) 1997 COSPAR. Published by Elsevier Science Ltd.