We investigate the economic viability of coupling a wind farm with compressed air energy storage (CAES) to participate in the day-ahead electricity market at a time when renewable portfolio standards are not binding and wind competes freely in the marketplace. In our model, the CAES is used to reduce the risk of committing uncertain quantities of wind energy and to shift dispatch of wind generation to high price periods. Other sources of revenue (capacity markets, ancillary services, price arbitrage) are not included in the analysis. We present a model to calculate profit maximizing day-ahead dispatch schedules based on wind forecasts. Annual profits are determined with dispatch schedules and actual wind generation values. We find that annual income for the modeled wind-CAES system would not cover annualized capital costs using market prices from the years 2006 to 2009. We also estimate market prices with a carbon price of $20 and $50 per tonne CO2 and find that revenue would still not cover the capital costs. The implied cost per tonne of avoided CO2 to make a wind-CAES profitable from trading on the day-ahead market is roughly $100, with large variability due to electric power prices. (C) 2012 Elsevier Ltd. All rights reserved.