Magnesium chloride hydrates are characterized as promising energy storage materials in the builtenvironment. During the dehydration of these materials, there are chances for the release of harmful HCl gas, which can potentially damage the material as well as the equipment. Hydrolysis reactions in magnesium chloride hydrates are subject of study for industrial applications. However, the information about the possibility of hydrolysis reaction, and its preference over dehydration in energy storage systems is still ambiguous at the operating conditions in a seasonal heat storage system. A density functional theory level study is performed to determine molecular structures, charges, and harmonic frequencies in order to identify the formation of HCl at the operating temperatures in an energy storage system. The preference of hydrolysis over dehydration is quantified by applying thermodynamic equilibrium principles by calculating Gibbs free energies of the hydrated magnesium chloride molecules. The molecular structures of the hydrates (n = 0, 1, 2, 4, and 6) of MgCl2 are investigated to understand the stability and symmetry of these molecules. The structures are found to be noncomplex with almost no meta-stable isomers, which may be related to the faster kinetics observed in the hydration of chlorides compared to sulfates. Also, the frequency spectra of these molecules are calculated, which in turn are used to calculate the changes in Gibbs free energy of dehydration and hydrolysis reactions. From these calculations, it is found that the probability for hydrolysis to occur is larger for lower hydrates. Hydrolysis occurring from the hexa-, tetra-, and dihydrate is only possible when the temperature is increased too fast to a very high value. In the case of the mono-hydrate, hydrolysis may become favorable at high water vapor pressure and at low HCl pressure.