Energy storage technologies have gained considerable momentum in the recent years owing to the rising tide of renewables. The deployment of energy storage is a trend set to continue into 2018 and beyond. In the near future, compressed air energy storage (CAES) will serve as an integral component of several energy intensive sectors. However, the major drawback in promoting CAES system in both large and small scale is owing to its minimum turn around efficiency. In the present work the major drawbacks associated with various existing configurations of CAES system are analysed. Interesting results of Isothermal CAES system are obtained through the present analysis to generate additional output energy compared to the supplied input by harnessing the free energy from the natural water bodies/ocean to enhance the overall turnaround efficiency of the system. The optimum operational characteristics of charging and discharging cycles are also addressed. In the present energy scenario, increasing the percentage of renewable energy (RE) share in the power generation is quite challenging since RE based power generation is intermittent in nature. The integration of energy storage technologies with RE source is imperative as it mitigates the intermittency of available energy. However, the development of efficient energy storage systems is one of the prime challenges in the promotion of renewable energy in a large scale. Among the various storage systems, electrochemical battery storage and pumped hydro storage (PHS) have attracted the commercial market. However, the shorter cycle life makes the battery storage more expensive and the PHS systems involves certain geographical and site constraints. Beyond the said storage systems, compressed air energy storage system which is one of the technically proven system has not been targeted the commercial market owing to its lower turnaround efficiency. Hence, the motivation behind the present research is towards developing efficient CAES configuration with higher turnaround efficiency thereby attaining economic feasibility and sustainability. © 2018 The Author(s).