The Compressed Air Energy Storage (CAES) concept is analyzed as an exergy storage concept. A thermodynamic analysis involving the application of the first and second laws of thermodynamics to both the charge and discharge processes is made. Works, heats, cavern energy changes, cavern exergy changes, and dissipations are evaluated for two designs—one idealized and the other more practical. An appropriate effectiveness based on the exergy concept is defined and evaluated.

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