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• A novel open type I-CAES with hydraulic machine and spray cooling is proposed. • A transient thermodynamic model including air-water heat transfer is presented. • OI-CAES enables continuous energy storage and near isothermal compression. • Indicated efficiency of 98% and roundtrip efficiency of 76% are achieved. • Compression and expansion time ratio of 99% and 96% are obtained. Isothermal compressed air energy storage (I-CAES) is a high efficient emission-free technology to facilitate the integration of fluctuating renewable energy into the power grid. However, in conventional closed type I-CAES (CI-CAES), the volumetric energy storage density is very low since two working mediums exist (water and air) and the water storage tank doubles the system volume. Thus, an open type I-CAES (OI-CAES) is proposed to solve this problem. Based on reversible hydraulic pump/turbine, the proposed system could achieve continuous energy storage/release and increase the compression/expansion time ratio, thus increasing the volumetric energy storage density. Combined with spray cooling, OI-CAES system could achieve near isothermal compression/expansion and improve the energy storage efficiency. A transient mathematical model is established based on thermodynamic laws and heat transfer theory. Thermodynamic analyses including a single cycle analysis and a continuous cycle analysis are carried out. A comprehensive performance assessment of the proposed systems is conducted and the effect of spray flow rate is analyzed. The results show that the compression time ratio during energy storage and the expansion time ratio during energy release are increased to 99.2% and 95.6% respectively. The energy storage density is doubled compared to CI-CAES at the same working pressure. The nearly isothermal compression/expansion is achieved with air temperature change as low as 5 °C. The indicated efficiency and roundtrip efficiency are as high as 0.98 and 0.76 respectively. [ABSTRACT FROM AUTHOR]