The main purpose of this paper is to present a robust forward model for simulating extraction and storage of thermal energy in an aquifer. The model is a local three-dimensional finite element model with boundary conditions derived from an analytic large-scale model based on the regional water balance. Numerical investigations and thermo-hydraulic evaluation of a typical dipole injection/extraction system are presented. Most of the simulation results are focused on the spatio-temporal extension of the hot water plume close to the injection well where the main challenges occur with respect to numerical stability. Because the (aquifer thermal energy storage system is located close to the groundwater divide, the energy recovery is less sensitive to the well configuration with respect to the groundwater flow direction.