The invention relates to the field of energy storage, and provides a compressed air energy storage system and a using method thereof. The system comprises an air storage unit, a hydrogen storage unitand a power generation unit, wherein the air storage unit comprises a compressor and an air storage chamber communicated with an outlet of the compressor; the hydrogen storage unit comprises an electrolytic tank and a hydrogen storage chamber communicated with a hydrogen outlet of the electrolytic tank; the power generation unit comprises a burner, a turbine and an electric generator; the air storage chamber and the hydrogen storage chamber are respectively communicated with an inlet of the burner by means of an air storage valve and a hydrogen storage valve, and an outlet of the burner is connected with the electric generator by means of the turbine. The compressed air energy storage system is based on the characteristics of large power of the compressor and variable power of the electrolytic tank; the operating state of the compressor and the electrolytic tank is controlled and adjusted in real time according to the power output of a renewable energy power source, so that the compressor and the electrolytic tank can respectively consume the electrical energy of the smooth part and peak part of the power output of the renewable energy power source; therefore, not only can green and efficient storage and regeneration of renewable energy electricity be realized, but also any secondary carbon emission is also avoided.