Performance and economic feasibility analysis was conducted on compressed air energy storage (CAES), where steam injection was applied. The pressure and temperature of the stored air change according to the operation of the CAES, having a great influence on the performance of the system. Considering this, the off-design analysis model was applied to each component. Dimensionless performance maps were applied to each compressor and turbine. A conventional CAES (C-CAES) was modeled based on commercialized CAESs, and a steam-injected CAES (SI-CAES) was then devised by adding a heat recovery steam generator. The system was assumed to store compressed air during the off-peak time and generate power during the peak time. The electricity generation of SI-CAES was predicted to be 7% greater than that of C-CAES but the efficiency decreased by approximately 0.8%. The estimated payback period was less than 6.5 years. If the heat recovery is added to the compression process, the efficiency increases. It was predicted that the heat recovery would result in a longer payback period but the maximum would be less than 10 years. Overall, steam injection is an effective method for augmenting the power generation of CAES for peak load management. (C) 2017 Published by Elsevier Ltd.