Adiabatic compressed air energy storage (A-CAES) with advanced thermal energy storage systems has enormous potential in applications. In particular, the extent of thermal energy utilization determines the comprehensive performance of an A-CAES system. In this paper, a cascaded latent heat packed bed storage system is used as a thermal energy storage under variable conditions of A-CAES. The transient thermal characteristic of the packed bed under variable conditions are further studied. Moreover, the key parameters that affect the thermal energy utilization of the system are also parametrically investigated. The results show that the proposed system has a roundtrip efficiency of 63.42 %, an exergy efficiency of 66.58 %, and a payback period of 4.63 years. The economic analysis shows that the proposed system is more advantageous in comparison with A-CAES with heat transfer oil as heat storage system.