The compressed air energy storage market is expected to grow from USD 0.48 billion in 2025 to USD 1.88 billion by 2030, at a CAGR of 31.4% during the forecast period. The market is driven by the growing need for long-duration, emission-free energy storage solutions to support renewable integration and enhance grid reliability. Compressed air energy storage (CAES) systems enable large-scale storage of surplus renewable electricity and provide dispatchable power without direct greenhouse gas emissions, making them a feasible option for reducing reliance on fossil fuels and achieving climate targets. Rising renewable energy adoption directly increases the demand for supporting storage infrastructure such as CAES plants. Market expansion is further reinforced by laws, policies, and investment incentives that favor clean, sustainable energy storage technologies.
The technology for underground CAES is well established and widely proven, which reduces development risks and attracts greater investor confidence. Additionally, underground facilities are strategically suited for deployment in regions with moderate to high renewable penetration, offering long-duration capacity that strengthens grid stability and resilience. Their scalability and adaptability make them ideal for meeting growing market demand, while their economic feasibility in terms of construction, maintenance, and long operational life further reinforces their role in advancing CAES adoption globally.
In Europe, ambitious climate targets and renewable energy directives are driving strong policy support for long-duration storage solutions such as CAES. The EU's Green Deal, along with funding mechanisms like Horizon Europe and Projects of Common Interest (PCI), provides financial and regulatory backing to accelerate development. National governments in countries like Germany and the Netherlands are further supporting CAES projects through grid modernization incentives and renewable integration programs.
In-depth interviews were conducted with various key industry participants, subject-matter experts, C-level executives of key market players, and industry consultants, among others, to obtain and verify critical qualitative and quantitative information and assess future market prospects. The distribution of primary interviews is as follows:
Hydrostor (Canada), APEX CAES (US), Storelectric LTD. (UK), Keep Energy Systems (UK), Corre Energy (Netherlands), TerraStor Energy Corporation (US), ALCAES (Switzerland), Augwind (Israel), Enairys Powrtech (Switzerland), Highview Power (UK), Baromar (Israel), Powerphase International (US), Sherwood Power (UK), Brayton Energy, LLC (US), Siemens Energy (Germany), Evellence (Germany), Ingersoll Rand (US), KOBE STEEL, LTD. (Japan), Doosan Škoda Power (Czech Republic), Green-Y Energy AG (Switzerland), Shaangu (China), Atlas Copco Group (Sweden), Harbin turbine company limited (China), and MITSUBISHI HEAVY INDUSTRIES, LTD. (Japan) are some of the key players in the compressed air energy storage market. The study includes an in-depth competitive analysis of these key players in the compressed air energy storage market, with their company profiles, recent developments, and key market strategies.
The report's scope covers detailed information regarding the major factors, such as drivers, restraints, challenges, and opportunities, influencing the growth of the compressed air energy storage market. A thorough analysis of the key industry players has provided insights into their business overview, solutions, and services; key strategies such as contracts, partnerships, agreements, expansion, Joint ventures, collaborations, and acquisitions; and recent developments associated with the compressed air energy storage market. This report covers the competitive analysis of upcoming startups in the compressed air energy storage market ecosystem.
Grid management segment to register highest CAGR from 2025 to 2030
Compressed air energy storage (CAES) systems enhance operational efficiency by providing long-duration flexibility and balancing supply-demand fluctuations. They mitigate the challenges of renewable intermittency, ensuring stability against underutilized generation during low-demand periods and preventing overburdening of grids during peak loads. The technology supporting grid management through CAES is maturing, reducing development risks and encouraging large-scale investment. Furthermore, CAES systems integrate well into existing transmission and distribution networks, allowing utilities to target regions of moderate to high renewable penetration. Their versatility in scale and siting offers significant deployment opportunities, improving overall grid resilience and accessibility. Additionally, the predicted expansion of renewable capacity is well supported by the economic feasibility of CAES in grid management, particularly in terms of system lifetime, low operating costs, and provision of ancillary services.Underground storage form to be the fastest-growing segment during forecast period
In the underground storage segment, compressed air energy storage (CAES) systems achieve higher efficiency and reliability by utilizing naturally occurring or purpose-built caverns, such as salt domes, aquifers, or hard-rock formations. These geological structures provide large, secure, and cost-effective storage volumes, avoiding the underutilization risks of smaller above-ground tanks and the potential cost intensiveness of alternative storage solutions.The technology for underground CAES is well established and widely proven, which reduces development risks and attracts greater investor confidence. Additionally, underground facilities are strategically suited for deployment in regions with moderate to high renewable penetration, offering long-duration capacity that strengthens grid stability and resilience. Their scalability and adaptability make them ideal for meeting growing market demand, while their economic feasibility in terms of construction, maintenance, and long operational life further reinforces their role in advancing CAES adoption globally.
Europe to be fastest-growing compressed air energy storage market
Europe is the fastest-growing market for compressed air energy storage (CAES), supported by several large-scale projects. In Germany, Corre Energy and Eneco are developing a major CAES facility in Ahaus using salt caverns, which is expected to provide over 300 MW of generation capacity by 2027. In the Netherlands, Corre Energy is advancing the Zuidwending project in Groningen, designed as a hydrogen-enabled CAES plant with multi-day storage capability. Alongside these, the EU is supporting innovation projects such as ASTERIx-CAESar, which integrates CAES with solar thermal systems to improve efficiency and flexibility. These initiatives highlight Europe's strong commitment to long-duration storage as part of its energy transition strategy.In Europe, ambitious climate targets and renewable energy directives are driving strong policy support for long-duration storage solutions such as CAES. The EU's Green Deal, along with funding mechanisms like Horizon Europe and Projects of Common Interest (PCI), provides financial and regulatory backing to accelerate development. National governments in countries like Germany and the Netherlands are further supporting CAES projects through grid modernization incentives and renewable integration programs.
In-depth interviews were conducted with various key industry participants, subject-matter experts, C-level executives of key market players, and industry consultants, among others, to obtain and verify critical qualitative and quantitative information and assess future market prospects. The distribution of primary interviews is as follows:
- By Company Type: Tier 1 - 57%, Tier 2 - 29%, and Tier 3 - 14%
- By Designation: C-Level Executives - 35%, Directors - 20%, and Others - 45%
- By Region: North America - 20%, Europe - 15%, Asia Pacific - 30%, Middle East & Africa - 25%, and South America - 10%
Hydrostor (Canada), APEX CAES (US), Storelectric LTD. (UK), Keep Energy Systems (UK), Corre Energy (Netherlands), TerraStor Energy Corporation (US), ALCAES (Switzerland), Augwind (Israel), Enairys Powrtech (Switzerland), Highview Power (UK), Baromar (Israel), Powerphase International (US), Sherwood Power (UK), Brayton Energy, LLC (US), Siemens Energy (Germany), Evellence (Germany), Ingersoll Rand (US), KOBE STEEL, LTD. (Japan), Doosan Škoda Power (Czech Republic), Green-Y Energy AG (Switzerland), Shaangu (China), Atlas Copco Group (Sweden), Harbin turbine company limited (China), and MITSUBISHI HEAVY INDUSTRIES, LTD. (Japan) are some of the key players in the compressed air energy storage market. The study includes an in-depth competitive analysis of these key players in the compressed air energy storage market, with their company profiles, recent developments, and key market strategies.
Study Coverage:
The report defines, describes, and forecasts the compressed air energy storage market by type (Adiabatic, Diabatic, Isothermal), expenditure type (CAPEX, OPEX), storage form (Underground, Underwater, Above ground), capacity (Small (Below 50 MWh), Medium (50-500 MWh), Large (above 500 MWh)), Application (Grid Management, Renewable Energy Integration, Others), and region (North America, Europe, Asia Pacific, RoW).The report's scope covers detailed information regarding the major factors, such as drivers, restraints, challenges, and opportunities, influencing the growth of the compressed air energy storage market. A thorough analysis of the key industry players has provided insights into their business overview, solutions, and services; key strategies such as contracts, partnerships, agreements, expansion, Joint ventures, collaborations, and acquisitions; and recent developments associated with the compressed air energy storage market. This report covers the competitive analysis of upcoming startups in the compressed air energy storage market ecosystem.
Key Benefits of Buying the Report
- The report includes the analysis of key drivers (Growing integration of renewable energy, Enables short-term and long-term storage across diverse applications, Long operational lifespan and reduced maintenance requirements), restraints (Competition from alternative storage technologies, Geological dependency and storage feasibility,) opportunities (Government incentives & regulatory support, Rising need to ensure grid resilience) and challenges (High upfront capital costs, Lower round-trip efficiency).
- Product Development/Innovation: Compressed air energy storage (CAES) market participants are advancing innovations across the value chain - covering storage form, capacity, expenditure models, and applications. In plant design, modular and scalable configurations, optimized turbomachinery, and advanced thermal management systems are enhancing efficiency, flexibility, and reliability. In storage and compression, companies are developing improved cavern engineering techniques, isothermal and adiabatic processes, and hybrid systems with hydrogen or thermal storage to boost round-trip efficiency and reduce emissions. Digital tools, including AI-driven plant optimization, predictive maintenance, real-time monitoring, and smart grid integration, are increasingly being deployed to improve performance, extend asset life, and ensure seamless integration with renewable energy and grid management systems.
- Market Development: In May 2024, BaroMar and RheEnergise signed an agreement to advance long-duration energy storage (LDES) projects in Cyprus and the UK. Under this partnership, BaroMar engaged Jacobs to design a 4 MWh underwater compressed air energy storage (CAES) pilot off Cyprus' coast, using rigid seabed-ballasted tanks to bypass land constraints. Meanwhile, RheEnergise launched a 500 kW high density pumped hydro energy storage (PHES) project at Sibelco's Cornwood mining site near Plymouth, UK, utilizing dense fluids for compact operation. This report provides a detailed analysis of compressed air energy storage solution provider strategies critical for project success, providing stakeholders with actionable insights into trends and opportunities for growth in the compressed air energy storage market.
- Market Diversification: The report offers a comprehensive analysis of the strategies employed by compressed air energy storage solution providers to facilitate market diversification. It outlines innovative products and operating models, as well as new partnership frameworks across various regions, underpinned by technology-driven business lines. The findings emphasize opportunities for expansion beyond traditional operations, identifying geographical areas and customer segments that are currently served but remain underserved and are suitable for strategic entry.
- Competitive Assessment: The report provides in-depth assessment of market shares, growth strategies, and service offerings of leading players such as Hydrostor (Canada), APEX CAES (US), Storelectric LTD. (UK), Keep Energy Systems (UK), Corre Energy (Netherlands), TerraStor Energy Corporation (US), ALCAES (Switzerland), Augwind (Israel), Enairys Powrtech (Switzerland), Highview Power (UK), Baromar (Israel), Powerphase International (US), Sherwood Power (UK), Brayton Energy, LLC (US), Siemens Energy (Germany), and Evellence (Germany), among others, in the compressed air energy storage market.
Table of Contents
1 Introduction
2 Research Methodology
4 Premium Insights
5 Market Overview
6 Compressed Air Energy Storage Market, by Expenditure Type
7 Compressed Air Energy Storage Market, by Type
8 Compressed Air Energy Storage Market, by Storage Form
9 Compressed Air Energy Storage Market, by Capacity
10 Compressed Air Energy Storage Market, by Application
11 Compressed Air Energy Storage Market, by Region
12 Competitive Landscape
13 Company Profiles
14 Appendix
List of Tables
List of Figures
Companies Mentioned
The key companies profiled in this Compressed Air Energy Storage market report include:- Hydrostor
- Storelectric Ltd
- Corre Energy
- Apex Caes
- Augwind
- Highview Power
- Keep Energy Systems
- Baromar
- Sherwood Power
- Terrastor Energy Corporation
- Alacaes
- Enairys Powertech
- Powerphase International
- Brayton Energy, LLC
- Siemens Energy
- Everllence
- Ingersoll Rand
- Kobe Steel, Ltd.
- Doosan Škoda Power
- Green-Y Energy AG
- Shaangu
- Harbin Turbine Company Limited
- Atlas Copco Group
- Mitsubishi Heavy Industries, Ltd.
Table Information
| Report Attribute | Details |
|---|---|
| No. of Pages | 236 |
| Published | October 2025 |
| Forecast Period | 2025 - 2030 |
| Estimated Market Value ( USD | $ 0.48 Billion |
| Forecasted Market Value ( USD | $ 1.88 Billion |
| Compound Annual Growth Rate | 31.4% |
| Regions Covered | Global |
| No. of Companies Mentioned | 25 |
