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In recent years, due to the very intensive development of renewable sources (working in a very irregular and unpredictable way), energy storage has acquired a special importance for the stability of the power system. There are many methods of energy storage, but only two have adequate capacity and power: Pumped Hydro Storage (PHS) and Compressed Air Energy Storage (CAES). The article presents energy analysis of energy storage system based on compressed air inside underground mining caverns. A dynamic mathematical model of CAES system of parameters and structure similar to the Huntorf type power plant was constructed. Filling and emptying of the cavern with compressed air was numerically simulated. Balance calculations for selected configuration of the system was performed. Four different equations were used to describe the efficiency of the storage.