FIRST CAES project was built in 1978 in Germany (new tech fail)
NY Times - "When the wind is blowing, it is usually the cheapest peaking power available. However utilities need consistent always-on power from large, cheap coal and nuclear power plants that are the backbone of the electric grid. Wired reports that operators are looking at Compressed Air Energy Storage (CAES) using abandoned mines and sandstones of the Midwest to store compressed-air. This converts the intermittent motions of the air into a steady power source by using it to run air compressors to pump air into an underground cave where it's stored under pressure...
*Please read full at NY Times & Wired
White paper on CAES by xcelenergy and report by Samir Succar, here
Also see Mr. Succars review of latest here