[happenstance]

When you compress air, it heats up and expands -- thus making the pressure go up faster than one might expect. So, when storing it you lose a lot of energy as heat.

When you let it uncompress, it cools -- losing a lot of energy again.

Point is, you lose quite a bit of energy going both ways.

A good solution might be to combine wind and pumped hydro: have the wind turbine pump water to a higher elevation when extra wind is available.

[jessriedel]

That is definitely an interesting point, although I assume it was taken into account when companies and the government did their comparison with hydroelectric storage. Larger caverns should reduce the amount of energy lost due to heat.