At present, the heat storage sub-system in the adiabatic compressed air energy storage system generally has low heat storage density and limited heat storage temperature, resulting in mediocre power generation efficiency of the system. To address these issues, this paper proposes a novel approach for coupling the energy storage system with geothermal energy utilization. This study innovatively uses coaxial casing wells to extract geothermal energy and to preheat compressed air in front of the expander. Detailed numerical investigations and dynamic thermodynamic analysis are carried out to evaluate system performance. Sensitivity and optimization are analyzed to identify the operational and design parameters of the proposed system. In addition, an economic analysis is conducted to estimate the investment and payback of the energy storage system. The results show that geothermal energy utilization can directly and significantly enhance the electric, heating and cooling energy output of compressed air energy storage system. During one 24-hours operation cycle, the electricity output is 104.45GJ, the heating supply output is 81.59 GJ, and the cooling supply output is 16.69 GJ. The RTE and energy efficiency are 64.26 % and 122.68 %, respectively. Economic analysis shows that the static payback period is 12.17 years, and the net present value can reach 3.46 million USD. It can be concluded that geothermal energy plays a greater role in energy storage systems than geothermal power production alone. The compressed air energy storage system combined with geothermal energy addresses current issues and leads to improved system performance.