A low-cost hybrid energy storage system receives energy from one or more external sources, and has an air compressor, low-pressure compressed air energy storage (CAES) system that receives compressed air from the compressor, and a low-temperature thermal energy storage (LTES) system that extracts heat generated by the compression of the air. The LTES system heats an expansion air stream released from the CAES system. The expansion air stream is augmented by air from a turbocharger, and further heated by the exhaust stream of a power turbine. At least a portion of the augmented air stream is further heated in a high-temperature thermal energy storage system that receives energy from the one or more external source. The augmented stream is directed to the turbocharger, and then through the power turbine to generate output energy.