Analysis on the Status of Compressed Air Energy Storage (CAES) in
China and Future Development Trends
Wenchu Wang
*
Environmental Engineering, Dalian Maritime University, Dalian, Liaoning Province, 116000, China
*
Keywords: "Dual Carbon" Goals, Compressed Air Energy Storage, New Energy Storage Technologies.
Abstract: To achieve the ambitious goals of carbon peaking and carbon neutrality, China is vigorously developing
renewable energy sources to replace the combustion of fossil fuels. Concurrently, in recent years, China has
also been intensively developing new energy storage technologies to mitigate the fluctuations caused by the
integration of renewable energy into the grid. Among these new energy storage technologies, the development
of Compressed Air Energy Storage (CAES) technology stands out. Although relatively mature, CAES has not
yet been widely applied, presenting significant research potential. This article will start by comparing CAES
technology with traditional Pumped Hydro Energy Storage (PHES) to analyze the advantages of CAES. It
will then systematically examine various types of CAES technologies, predicting the future development
trends of this technology in China based on the status. The analysis concludes that CAES is the most promising
new energy storage technology in China. In the future, it is expected to achieve performance comparable to
pumped hydro storage, enabling large-scale applications across diverse scenarios.
1 INTRODUCTION
With the development of society, people's standard of
living is continuously improving, leading to an
increase in energy demand. Currently, the
combustion of fossil fuels remains the primary means
of energy acquisition in China, leading to a
continuous increase in atmospheric greenhouse gas
concentrations and carbon emissions. In 2020, China
officially proposed the "dual carbon" goals of peaking
carbon emissions by 2030 and achieving carbon
neutrality by 2060. This objective has significantly
accelerated the development of renewable energy. In
recent years, China has vigorously developed
renewable energy sources such as wind and
photovoltaic power. However, these energy sources
are characterized by volatility and randomness,
necessitating the integration of energy storage
technologies to mitigate issues arising from the
mismatch between power supply and demand (Wu et
al, 2001). Energy storage technologies enable the
large-scale and efficient utilization of renewable
energy, thereby promoting the transition to low-
carbon energy and sustainable development. In recent
years, China has been seeking low-cost, high-
*
Corresponding author
efficiency, and sustainable energy storage
technologies to support the future new power system.
Energy storage systems can generally be divided
into two primary categories, traditional and novel.
Pumped Hydro Energy Storage (PHES), as an
efficient and widely used traditional energy storage
technology, holds the largest share of installed
capacity among energy storage technologies in China.
However, its construction and operation are
significantly influenced by terrain and water
conditions, and it has reached a bottleneck phase with
increasing development costs, indicating limited
future growth. In the realm of emerging energy
storage technologies, Electrochemical Energy
Storage (EES) currently holds the largest share.
Nonetheless, it remains immature and is constrained
by numerous factors such as the challenges of end-of-
life disposal and very high development costs,
making it far from ready for large-scale application.
CAES, the second most installed emerging
technology after electrochemical storage, has seen
rapid development in China in recent years and has
reached a relatively mature stage, as shown in figure
1. CAES boasts inherent advantages such as large
storage capacity, environmental friendliness, short
184
Wang, W.
Analysis on the Status of Compressed Air Energy Storage (CAES) in China and Future Development Trends.
DOI: 10.5220/0013872700004914
Paper published under CC license (CC BY-NC-ND 4.0)
In Proceedings of the 2nd International Conference on Renewable Energy and Ecosystem (ICREE 2024), pages 184-189
ISBN: 978-989-758-776-4
Proceedings Copyright © 2025 by SCITEPRESS – Science and Technology Publications, Lda.

Figure 1: The cumulative installed capacity of operational energy storage projects in China (as of the end of June 2023)
construction periods, and long operational lifespan.
These attributes give it significant development
potential and the prospect of large-scale commercial
deployment in the future.
2 INTRODUCTION AND
COMPARISON OF RELEVANT
ENERGY STORAGE
TECHNOLOGIES
2.1 PHES
PHES is currently the most widely used and
technologically mature large-scale energy storage
technology in China. It has been established as a
traditional energy storage technology, with
significant utilization and development within the
country. The energy is converted in the form of
gravitational potential energy and electrical energy. A
pumped storage system mainly consists of two
reservoirs at different altitudes. During periods of low
electricity demand, excess electrical energy is used to
drive the pump motor units to transfer water from the
lower reservoir to the upper one. In this stage, energy
in the form of electricity is converted into the
potential energy of water. When the demand for
electricity rises, the stored water flows from a higher
elevation to a lower one, driving the generator to
produce electricity and converting potential energy
back into electrical energy. The earliest pumped
storage power plant in China was built in the 1960s.
As of 2021, the total capacity of PHES in China
reached 36.39 million kW (Li et al, 2023). According
to China's "Pumped Storage Medium and Long-term
Development Plan (2021-2035)," the total installed
capacity of pumped storage will exceed 62 million
kW by 2025 and reach 120 million kW by 2030 (Zhou
et al, 2023). The development of China's PHES
industry is expected to continue accelerating in the
future, with an average annual installed capacity
projected to exceed 6 million kW within the next
decade, tripling the current scale. In conclusion,
PHES is anticipated to remain the primary method of
energy storage in China in the future.
2.2 CAES
CAES, similar to pumped storage, falls under the
category of mechanical energy storage. However, it
represents a relatively mature form of new energy
storage technology. In China's array of new energy
storage technologies, its installed capacity ranks
second only to electrochemical energy storage, and it
has experienced rapid development in recent years.
The operational principle of CAES involves utilizing
surplus electrical energy to power compressors for air
compression, thereby converting it into the pressure
energy of compressed air. When there is a need for
electricity, the stored compressed air in tanks,
caverns, or other storage spaces is released to drive
turbines, generating electricity and thus transforming
the stored energy back into electrical energy. The
origin of CAES dates to the 1940s when German
engineer Stal Laval patented the concept of storing
electricity using air in underground storage chambers,
marking the advent of CAES technology. In China,
the development of CAES technology began
relatively late, only starting in the 21st century. The
10 MW compressed air energy storage power station
in Feicheng, Shandong Province, is the country's first
Analysis on the Status of Compressed Air Energy Storage (CAES) in China and Future Development Trends
185

grid-connected commercial CAES power station,
which successfully delivered power for the first time
on August 4, 2021. China possesses abundant natural
geological resources, such as salt caverns, which have
significant potential for utilization.
2.3 Comparison of PHES and CAES
PHES, as the earliest developed and most mature
technology, has numerous advantages including large
energy storage capacity, low operating costs, high
power output, and high efficiency. However, it also
has inherent disadvantages, such as a heavy reliance
on geographic conditions like significant elevation
differences. As the scale of construction expands, the
difficulty of development increases. Additionally,
pumped storage projects are expensive to build, have
long construction periods, and may cause
environmental pollution during construction. CAES,
in contrast, not only shares the advantages of large
storage capacity, high system efficiency, and long
storage duration, but also boasts lower construction
costs, shorter construction periods, and zero
pollution—advantages that pumped storage does not
have. However, both technologies share common
drawbacks, including slow start-up speeds and low
energy density, which are critical issues that need to
be addressed in the future. Table 1 shows the specific
data comparison between the two technologies.
Table 1: Comparison of CAES and PHES
Parameter PHES CAES
Energy Storage
Powe
r
(
MW
)
100-3000 50-500
Operational
Lifespan (a)
40-60 20-40
Efficiency (%) 70-85 40-55 (up to 70%
with heat recovery)
Cost ($/kWh) 0.05-0.15 0.10-0.20
Construction
Perio
d
(a)
4-10 2-5
Start-up Speed Minutes to
tens of
minutes
Minutes to tens of
minutes
Despite the advantages, pumped storage in China
has reached a period of bottleneck, making significant
breakthroughs difficult. In contrast, CAES is in a
rapid development phase, with the potential to
achieve cost parity with pumped storage and large-
scale commercialization in the future (Li et al, 2023).
To meet the “dual carbon” goal, China is expected
to implement a series of environmentally friendly
energy storage support policies, further promoting the
development of zero-pollution energy storage
technologies like CAES. CAES has enormous
potential for future development and is highly
valuable for research and development.
3 THE CLASSIFICATION OF
CAES
3.1 Classified by Storage Capacity
CAES can be classified based on storage capacity into
large-scale CAES systems, small-scale CAES
systems, and micro CAES systems (Zhang et al,
2023). Large-scale CAES systems typically operate
at the 100 MW level, offering the greatest peak
shaving capabilities and the largest scale. These
systems are usually integrated with sustainable
energy, for instance, photovoltaic power generation,
hydrogen, and wind power. Because of their reliance
on natural spaces like caverns and mines for air
storage, large-scale CAES systems are often
constrained by geographical location. Small-scale
and micro CAES systems, on the other hand, utilize
artificial high-pressure containers, such as high-
pressure storage tanks, for air storage. Small-scale
CAES systems, with power capacities around 10
MW, can couple with renewable energy sources like
wind energy, offering high flexibility without the
need for additional generators (Tan et al, 2019).
These systems are suitable for residential areas and
small grids. Micro CAES systems have power
capacities three orders of magnitude lower than
small-scale systems, with weaker power generation
capabilities and smaller air storage spaces. However,
they offer greater flexibility and ease of installation
and removal, making them ideal for home backup
energy or vehicle-mounted systems.
3.2 Classified by Idealized Change of
State
3.2.1
Diabatic Compressed Air Energy
Storage
(D-CAES)
D-CAES, also known as traditional compressed air
energy storage, improves compression efficiency
through inter-stage cooling during the gas
compression process. In the energy release process,
external heat sources or fossil fuel combustion are
used to heat the air, driving the expansion turbine.
The combustion heat increases the air temperature,
enhancing the enthalpy of the compressed air and its
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work capacity, thereby improving cycle efficiency
(Zhang et al, 2023). Due to significant heat
dissipation to the environment, the cycle efficiency of
D-CAES typically reaches only about 40%.
3.2.2 Adiabatic Compressed Air Energy
Storage (A-CAES) & Advanced
Adiabatic Compressed Air Energy
Storage (AA-CAES)
A-CAES addresses the low efficiency of D-CAES to
some extent by storing the heat generated during air
compression in thermal storage devices, which is
subsequently utilized to raise the heat of the
compressed air in the energy discharge phase. This
technique does not require burning fossil fuels,
making it clean and environmentally friendly.
Although the construction costs are higher, the cycle
efficiency is significantly improved, reaching 55% to
75% (Wu et al, 2023). AA-CAES is a further
advancement of A-CAES, involving more advanced
technologies and system designs. As an "upgraded
version" of A-CAES, AA-CAES can achieve even
higher efficiency.
3.2.3 Isothermal Compressed Air Energy
Storage (I-CAES)
I-CAES is a new type of energy storage that maintains
the air temperature within a specific range during the
compression and expansion processes using
specialized temperature control methods (He & Sun,
2022). According to thermodynamic theory,
isothermal compression consumes the least
compression work, while isothermal expansion
produces the most expansion work (Dib et al, 2021).
I-CAES systems generally use liquids with high
specific heat capacity, such as water or oil, to provide
a nearly constant temperature environment. This
increases the contact time between the gas and the
liquid, ensuring that the gas approaches isothermal
conditions during compression, thereby minimizing
heat loss and improving the overall cycle efficiency
(Wu et al, 2023). Although the theoretical efficiency
can reach up to 90%, achieving this in practical
designs is challenging. The development costs are
high, and the technology is still at a low level of
maturity.
3.3 Other Emerging Technologies of
CAES
In recent years, to achieve green energy storage and
the dual carbon goals, China has innovated and
derived several new technologies in the CAES field.
The main advancements include Liquid Air Energy
Storage (LAES) and Supercritical Compressed Air
Energy Storage (SC-CAES).
3.3.1 LAES
LAES is a thermomechanical energy storage
technology that uses electrical or renewable energy to
compress purified air to high pressure. The
compressed air is then cooled and liquefied by
passing through a cryogenic storage unit, storing the
excess energy in the form of low-temperature liquid
air. During the energy release phase, the liquid air is
pressurized by a cryogenic pump and then re-gasified
by extracting cold from the storage unit. Driven by
heated high-pressure gas, the turbine functions and
produces electricity. Liquid gas possesses a higher
density compared to compressed gas, providing
LAES with higher energy storage density and
efficiency (Xu, 2023). Additionally, the high density
means that a large amount of storage space is saved,
indirectly reducing dependence on specific
geological conditions such as underground salt
caverns and mines.
3.3.2 SC-CAES
SC-CAES is a technology first proposed by Chinese
researchers. SC-CAES fully utilizes the properties of
supercritical fluids. This type of fluid has excellent
heat conversion capabilities and its molecules are
packed very tightly. At the same time, it also
possesses high solubility, as well as low viscosity,
high diffusion coefficient, and good permeability of
supercritical gases. The operating principle is as
follows: During the energy storage phase, the air,
after processing, is at a supercritical condition.
(temperature > 132K, pressure > 37.9 bar) (Xu,
2023). The heat of compression is transferred using a
thermal storage heat exchanger, cooling the air to
ambient temperature and subsequently liquefying it
through isobaric cooling, with the compression heat
being recovered and stored. The compressed air, now
in liquid form, is stored at atmospheric pressure in
low-temperature storage tanks. During the energy
releasese phase, liquefied air is pressurized to
supercritical levels using a low-temperature pump. It
then passes through a cold storage heat exchanger,
which recovers cold energy as well as releases heat,
warming the air to ambient temperature. Finally, the
air expands through an expander to perform work,
simultaneously absorbing the stored compression
heat from the energy storage phase. The SC-CAES
system removes the need for burning fossil fuels and
Analysis on the Status of Compressed Air Energy Storage (CAES) in China and Future Development Trends
187

extensive corresponding storage facilities. It achieves
an energy density of up to 3.4×105 kJ/m³ and a
round-trip efficiency of 67% (Zhang et al, 2023).
4 THE STATUS AND
CHALLENGES OF THE
DEVELOPMENT OF CAES
4.1 Current Development Status in
China
CAES has seen very rapid growth domestically over
the past decade, gradually moving towards large-
scale, mature, and systematic implementation. In
China, the performance of CAES equipment has
significantly improved, progressing from the 10MW
class to the current 300MW class. In 2022, the biggest
350MW salt cavern CAES demonstration project in
the world commenced in Tai'an, Shandong Province.
This project employs an innovative low-melting-
point molten salt high-temperature adiabatic
compression technology. Once completed, it will
achieve several "world firsts" in the field of CAES.
On April 9, 2024, the world's first 300MW CAES
power station successfully connected to the grid and
began generating electricity in Hubei Province,
China, setting three world records in single-unit
power, energy storage capacity, and conversion
efficiency. These achievements signify that China has
elevated CAES technology to a new milestone
4.2 Challenges Faced and Related
Development Directions
4.2.1 System Efficiency
With current technology, the theoretical system
efficiency of CAES can reach approximately 75%.
Although China has become a world leader in this
technology, there remains a gap between the actual
system efficiency and the theoretical value. In China,
the system efficiencies for 1MW, 10MW, and
100MW systems are approximately 52%, 60%, and
70%, respectively, which are still lower than the
efficiency of PHES, indicating room for improvement
(Xu, 2023). To enhance equipment performance, the
country should continue to increase research and
development efforts, undertake technological
breakthroughs, and address core technical challenges.
Additionally, the promotion and application of this
novel technology should be strengthened,
accelerating the industrialization, commercialization,
and large-scale deployment of CAES technology.
This will foster a virtuous economic cycle, promoting
the perfection and development of the technology.
4.2.2 Construction Costs
Compared to traditional energy storage technologies,
the development cost of CAES technology is
relatively high, resulting in a higher cost per kilowatt-
hour. The primary reason for the high costs is the
substantial investment required for constructing
artificial air storage facilities, compressors, and
expanders. These three key components correspond
to three crucial systems. For projects utilizing salt
caverns for air storage, the total investment in these
three stages accounts for nearly 45% (Zheng et al,
2023). For projects using artificial caverns for air
storage, the cost of the storage system alone exceeds
30% (Zheng et al, 2023). In terms of building the
compression and expansion systems, China should
strive to develop more advanced technologies to
control costs. Additionally, related entities should
seek ways to achieve large-scale production to reduce
costs. For the air storage system, the government
should encourage the development of natural storage
facilities such as underground salt caverns, which not
only have lower construction costs compared to
artificial storage facilities but also offer larger storage
capacities. Furthermore, for the research and
development of all related technologies, government
departments should provide financial subsidies and
policy incentives.
4.2.3 Air Storage Devices
At the current stage, for CAES, air storage devices in
China are commonly located underground, utilizing
natural formations or artificially excavated caverns.
The selection of storage sites introduces a challenge,
for instance, the uncontrollable variations in
geological conditions can lead to underground gas
leaks, affecting construction and increasing difficulty
and costs (Zheng et al, 2023). Additionally, ensuring
the airtightness of the storage device itself is a core
challenge. Poor airtightness can result in energy loss,
increased operational costs, and reduced energy
conversion efficiency. If impurity gases leak, it could
also pose an explosion risk. To address these issues,
relevant safety departments should first implement
rigorous monitoring, inspection, and maintenance to
prevent accidents. Factors affecting airtightness
mainly include the cap rock, lining, and materials of
the storage containers (Zhang et al, 2023). Future
improvement measures should focus on these three
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aspects, seeking more suitable materials to enhance
the airtightness of the devices and fundamentally
resolve the problem.
4.3 Prospects Forecasts
CAES, with its advantages of site flexibility,
environmental friendliness, short construction period,
and low unit cost, is one of the most promising energy
storage technologies in China, offering significant
promotion value. Currently, China is in its 14th Five-
Year Plan period, which explicitly aims for the
transition of new energy storage technologies from
commercialization to large-scale development by
2025 (Liu, 2022). Moreover, under the backdrop of
the "dual carbon goals," new energy storage
technologies, exemplified by CAES, are undoubtedly
experiencing a golden development period. It can be
predicted that in the coming years, with continuous
technological advancements, improvements in
system efficiency, reduction in construction costs,
and national support, CAES technology is expected
to become one of the mainstream large-scale energy
storage technologies alongside PHES, helping to
alleviate the energy storage burden.
5 CONCLUSION
In comparison to PHES, CAES has the advantages of
shorter construction periods, better environmental
compatibility, and more flexible site selection. It is
currently the only large-scale, long-duration new
energy storage technology comparable to PHES, with
broad application prospects. At present, under the
vigorous promotion of new energy storage
technologies in China, CAES is at a critical stage of
large-scale commercial development, showing a
positive development trend. Although the energy
storage efficiency of CAES in China has not yet
reached the level of pumped hydro storage, with the
continuous maturation of technology and system
optimization, and the emergence of new technologies
such as LAES and SC-CAES, it can be predicted that
in the coming years, CAES will achieve large-scale
commercialization. It will be able to compete with
pumped hydro storage, becoming one of the key
technologies supporting China's achievement of its
"dual carbon" goals and promoting the quality of
energy storage infrastructure. This article provides a
comprehensive introduction to CAES technology and
its development status in China, offering a valuable
reference for researchers interested in further
studying this technology. It is hoped that future
analyses will take an international perspective to
evaluate the development of this technology, offering
recommendations and predictions.
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