Compressed Air Energy Storage is recognized as a promising technology for applying energy storage to grids which are more and more challenged by the increasing contribution of renewable such as solar or wind energy. The paper proposes a medium-size ground-based CAES system, based on pressurized vessels and on a multiple-stage arrangement of compression and expansion machinery; the system includes recovery of heat from the intercoolers, and its storage as sensible heat in two separate (hot/cold) water reservoirs, and regenerative reheat of the expansions. The CAES plant parameters were adapted to the requirements of existing equipment (compressors, expanders and heat exchangers). A complete exergy analysis of the plant was performed. For all components, cost data were sought on the market or from reference bibliographic sources. The results allow to calculate the final cost of the electricity unit (kWh) which is made available under peak-load (production) mode, and to identify the contribution within the plant of capital costs and component inefficiencies.