Compressed air energy storage
Compressed Air Energy Storage (CAES) is the term given to the technique of storing energy as the potential energy of a compressed gas. The usual technique is to pump air into large storage tanks or naturally occurring underground formations. Today , its main application is in solving the intermittency problems associated with wind turbine electrical generators. air compressors are run when the energy is available and they pump air into the storage cavern. conventional gas turbine expanders are used to expand the gas when the need arises.

Advantages of CAES:
ancillary services provided to the grid is the main advantage of CAES. peak shaving; spinning reserve; VAR support; and arbitrage etc are the various applications. energy from several sources can be stored and recovered at a later time.

Disadvantages:
losses are there as there is energy conversion. General Compression (using the wind turbine to compress the air directly) is used as a way to solve this problen to a certain extent. additional heating in the expansion process causes most of the inefficiency and can be seen as the disadvantage in CAES, which is even severe if fossil fuels are used for the heat addition.

Practical constraints in transportation
Comparison with batteries
Advanced fiber-reinforced bottles are comparable to the rechargeable lead-acid battery in terms of energy density. They can be far better because of constant voltage output over entire discharge period but in CAES, the voltage varies greatly with air pressure.
very high flux rate energy transfer can be done with CAES, which maybe particularly advantageous for hybrid vehicles.

visit these links for further details and report:

http://coen.boisestate.edu/WindEnergy/re...07-001.pdf
http://dresser-randliterature/general/85164-10-CAES.pdf
http://en.wikipediawiki/Compressed_air_energy_storage