Renewable energy sources which are gaining popularity over conventional resources mostly produce intermittent power as they fall under the influence of natural phenomena as daily cycle or weather conditions. However, worldwide remarkable growth of electricity generation from renewable resources in the recent years has resulted in the decentralized production posing network load stability problems, which requires proper energy storage. Therefore, energy storage system can make more efficient utilization of renewable energies available and hence it will be more practical in application. This research work discusses about the energy storage system which comprises the concepts of combined pumped-storage hydro electricity and compressed air energy storage. The system consists of two tanks, one open tank to the air and one closed tank which stores water and compressed air using multistage pump. The energy of compressed air will be released to drive water which passes through the hydro turbine resulting in the generation of electricity when the grid power is insufficient. This study focuses on the CFD analysis on the closed tank of energy storage system during discharge.