Renewable Energy systems have gained growing interest especially in the last decade. However, there are serious issues that come with these systems, related to the intermittency of the renewable energy sources. Energy storage could play a big role to solve or at least minimize the issues related to the intermittency of the renewable energy systems. Compressed air energy storage (CAES), among many has the ability to have a considerable impact when it comes to large scale renewable energy systems as it can absorb and release large amount of energy (100’s MW) for a long period of time (hours). An economic evaluation of CAES is important to establish its feasibility for large-scale renewable energy systems. An economic study is carried out in this paper taking Egypt as a case study for implementing CAES system as part of the proposed plans of increasing wind farms installation in Egypt by 2020.