The high-purity air output by expansion during energy release is discharged into the ambient for liquid air energy storage (LAES) technology, resulting in a large loss of material resources. Currently, LAES research focuses mostly on enhancing thermally driven power generation while disregarding the use of its discharging air. To address this issue, we proposed a novel air separation unit (ASU) with energy storage and air recovery (ASU-ESAR) based on the matching characteristics of air separation and LAES technologies in refrigeration temperature and material utilization. Except for storing liquid air on large-scale by employing ASU and directly recovering cold energy of liquid air, ASU-ESAR has the benefit and novelty of fully recycling high-purity air outputted during energy release, as well as its low temperature and high pressure energy, into ASU. Its process design and feasibility studies are carried out. Energy conservation efficiency, economic benefits, and its influences on China's power grid and emission reductions are assessed. Without any waste heat usage, an electrical round-trip efficiency of 55.82%–58.72% is presented. Taking Shanghai, China as an example, ASU-ESAR's electricity costs are reduced by 5.77%–7.65% when compared to conventional ASU, and the payback period for LAES system with a power capacity of 70.70–74.38 MWh/day is 2.2–2.9 years. The average peak-valley ratio (PVR) of China's power grid might fall by 13% once ASU-ESAR is implemented across the industry, and the yearly CO2 emissions could be reduced by 12.53-27.71 Mt. Its application can achieve a win-win situation of electricity cost savings in ASU operations as well as energy savings and emission reductions on the power generation side.