Abstract Compressed air-brine energy storage (CABES) is similar to ordinary compressed air energy storage (CAES). However, in CABES, the heat of compression of the air is stored via a surface-type heat exchanger in water or, preferably, concentrated brine contained in an unpressurized reservoir. Furthermore, the brine is stratified into a hot, lower density, upper layer and a cold, higher density, lower layer, thus eliminating half the needed reservoir volume. In the energy delivery phase the hot brine heats the compressed air prior to its expansion through an expander/generator to recover the stored electric energy. Calculations on a three-stage CABES plant indicate that: 1. (1) the overall electric efficiency is at least 67%; 2. (2) the energy storage density of the brine is 0.016 m 3 per electric kWh delivered from storage; 3. (3) the required unit heat transfer surface is 0.27 m 2 per electric kWh; 4. (4) the contribution of the reservoir and heat exchanger costs to the cost of electric energy delivered from storage is not excessive.