Energy storage systems are increasingly gaining importance with regard to their role in achieving load levelling, especially for matching intermittent sources of renewable energy with customer demand, as well as for storing excess nuclear or thermal power during the daily cycle. Compressed air energy storage (CAES), with its high reliability, economic feasibility, and low environmental impact, is a promising method for large-scale energy storage. Although there are only two large-scale CAES plants in existence, recently, a number of CAES projects have been initiated around the world, and some innovative concepts of CAES have been proposed. Existing CAES plants have some disadvantages such as energy loss due to dissipation of heat of compression, use of fossil fuels, and dependence on geological formations. This paper reviews the main drawbacks of the existing CAES systems and presents some innovative concepts of CAES, such as adiabatic CAES, isothermal CAES, micro-CAES combined with air-cycle heating and cooling, and constant-pressure CAES combined with pumped hydro storage that can address such problems and widen the scope of CAES applications, by energy and exergy analyses. These analyses greatly help us to understand the characteristics of each CAES system and compare different CAES systems.