Compressed air energy storage (CAES) is one of the most promising large capacity energy storage technologies and this technology which was used only for demand side management, it has not attained the status of an economic model due to its poor round-trip efficiency. However, in the emerging renewable power scenario, this technology has received a new interest among the scientists. In this paper, a comprehensive thermodynamic analysis is performed for conventional and modified configurations that enhances the round-trip efficiency appreciably. The results reveal that when the compressed air is kept at isothermal temperature at atmospheric condition, the mass of air stored in the tank will be high which will reduce the size of the storage tank appreciably for the given capacity. Further, the possibility of generating cool energy along with power generation during the expansion of compressed air from the atmospheric temperature is also addressed. Though this configuration yields a poor round-trip power efficiency, if the heat of compression and cool energy generated during expansion are utilized for other applications, then the overall polygeneration efficiency is very high. However, if the objective is to maximize the round-trip power efficiency then the compressed air in the storage tank to be heated by the stored heat along with the external heat source. The main conclusions drawn from this work will be of great help by providing guidelines for the future development of a high-efficiency Isothermal CAES (ICAES) system for enhanced power generation/combined with the concept of polygeneration. © 2019 Elsevier Ltd