The low efficiency is mainly since air heats up during compression. This waste heat, which holds a large share of the energy input, is dumped into the atmosphere. A related problem is that air cools down when it is decompressed, lowering electricity production and possibly freezing the water vapour in the air. To avoid this, large-scale CAES plants heat the air prior to expansion using natural gas fuel, which further deteriorates the system efficiency and makes renewable energy storage dependent on fossil fuels.
Small-scale compressed air energy storage systems with high air pressures turn the inefficiency of compression and expansion into an advantage. While large-scale AA-CAES aims to recover the heat of compression with the aim of maximizing electricity production, these small-scale systems take advantage of the temperature differences to allow trigeneration of electrical, heating and cooling power.