The increasing generation share of renewable energy sources in the power sector raises the demand for fast and flexible large-scale storage technologies. Steam generation via stoichiometric combustion of H2 and O2 within a steam cycle is a promising way to back convert both gases. These gases can be generated by electrolysis that utilizes excess renewable energy. At the same time, this technology could provide balancing and spinning network reserves. A crucial parameter of this approach is combustion efficiency, since residual H2 or O2 can damage downstream components of the steam cycle. The current paper investigates the combustion efficiency of a H2/O2 burner under steam diluted conditions. The combustion efficiency measurement is very challenging in this case, as the combustor products consist mostly of pure steam and cannot be dried for conventional gas analysis. This is solved by an in-situ measurement method to quantify the combustion efficiency. This approach and relevant challenges are presented along with results regarding the combustion efficiency of a model H2/O2 combustor. Additionally, a design configuration study of the combustor is conducted by varying the swirl intensity and examining jet as well as swirl-stabilized flames. The initial results of the project suggest that steam-diluted H2 oxyfuel combustion with efficiencies close to 100% is possible.