Intermittency characteristic of renewable energy sources can be resolved using an energy storage technology. The function of the energy storage system is to store the excess energy that is produced from various renewable energy sources during the off‐peak hours and releases the same energy during the peak hours. The energy that is produced from the renewable energy sources can be stored in different forms such as Mechanical, Electrical, Electrochemical, Thermal, Chemical energy etc. Among all these forms of stored energy, a CAES technology under the Mechanical form of energy is the most cost effective for the bulk energy storage purpose. It involves a combined operation of various components such as Compressor/Expander, Gas turbine, combustion chambers, heat exchangers, generator unit, and underground compressed air storage. This article focuses to review the detail of various CAES systems such as D‐CAES, A‐CAES, I‐CAES etc. Additionally, it presents various technologies that are used to improve the energy efficiency and applicability of the CAES system. It is found that a maximum RTE of the C‐CAES, A‐CAES, and I‐CAES are 54%, 71%, and 80%, respectively. In addition, the RTE of the modified CAES systems such as LP‐CAES, PH‐CAES, and SC‐CAES are about 90%, 80%, and 60 to 80%, respectively.