Advanced Adiabatic Compressed Air Energy Storage (AA-CAES) is a large-scale energy storage system based on gas turbine technology and thermal energy storage (TES). Electrical energy can be converted into internal energy of air and heat energy in TES during the charge process, while reverse energy conversion proceeds during discharge process. The performance of AA-CAES system requires further improvement in order to increase efficiency. In this paper, a multi-stage AA-CAES system model is established, and the influence of effectiveness and pressure loss in heat exchanger on energy conversion and utilization efficiency of AA-CAES system is analyzed theoretically based on the theory of thermodynamics. Four Cases about effectiveness and pressure loss of heat exchanger are investigated and compared with each other. It is found that effectiveness and pressure loss of heat exchanger are directly related to energy conversion and utilization in AA-CAES system. System efficiency changes with the variation of heat exchanger effectiveness and the impact of pressure loss on conversion of heat energy in TES is more sensitive than that of internal energy of air. Pressure loss can cause the complexity of system efficiency change. With appropriate selection of the values of heat exchanger effectiveness for both charge and discharge processes, an AA-CAES system with a higher efficiency could be expected. (C) 2014 Elsevier Ltd. All rights reserved.