ABSTRACTCurrently, advanced adiabatic compressed air energy storage (AA‐CAES) has been widely used, but the quantitative study of its energy loss is still unresolved. Therefore, the ideal AA‐CAES with a round‐trip efficiency (RTE) of 100% is defined to quantify the energy losses in the AA‐CAES from the aspects of factors and components, so as to clarify the loss mechanism of AA‐CAES. First, eight energy loss factors affecting the performances of AA‐CAES are identified. Then, based on component type, six components of AA‐CAES are identified. After that, to obtain the system energy flow, the corresponding thermodynamic models are developed. Finally, based on the given operating conditions, the energy losses corresponding to each factor and component are obtained sequentially using univariate analysis, and parametric analysis is carried out. The results show that in terms of energy loss factors, the storage device has the greatest impact on system performance with a compression work increment dEcharge of 72.56 MWh and an RTE of 89.21%. In terms of components, the compressors and turbines have the greatest impact on system performance. Furthermore, there is a synergistic effect among the factors. The effect of different factors acting together is greater than the superposition of individual values.