Energy storage has become a serious challenge since last few decades. The natural; resources are becoming exhausted and more energy is required to meet the increasing demands of technology, population and systems. Different methods of energy conservation have been adopted including the storage in forms of electrical, mechanical, thermal and chemical energy. Methods and techniques have been established to ensure the energy storage in these different forms. Some pronounced methods are the flywheel energy storage, hydroelectricity, etc. Emphasis is being developed on utilization of resources when they are not in excessive demand. Energy storage in off-peak demand is encouraged to make it utilized in peak demand periods. In the struggle to develop mechanisms to store energy for later use, one most developing area is the energy storage using the air. This method is known as compressed air energy storage (CAES). CAES systems depend on the availability of air to produce the energy and store it for use in high demand periods. The air is compressed and this compressed air is used later on through expansion for production of electricity by turning the turbines. Different ways and types of CAES systems have been studied. Adiabatic, diabatic and iso-thermal are the basic three types of compressed air energy storage systems. There are many variants developed from these basic three types as advanced adiabatic CAES. Although different methods have been studied and testing on small scale for implementation of CAES technology, but currently only the diabatic CAES has been used practically for large scale production of electricity by storing energy. Two known plants exist, one in US and other in Germany. Also the types of CAES systems depend on the structure of the underlying storage chamber. There are different geologies for the development of this chamber like salt, hard rock and porous rock. Presence of accurate geologies also drives the success of the CAES system. Research and studies are underway to make the large scale deployment of CAES based energy storage systems. It is expected that such systems will enhance the available energy and will reduce the pressure on the current supply of natural resources of energy by storing them appropriately on excess available times.