This report presents a solution to the power interruption during the period of power transfer from grid supply to the diesel generator during power interruption from the grid. The method is proposed to use in one of the leading gloves manufacturing factories in Sri Lanka which incurs loss of production and hence financial losses during power transfer period. This report proposes to use compressed air energy storage system to provide uninterrupted power supply during the power transfer period. The report provides feasible method to provide uninterrupted supply during power transfer period. These methods utilize compressed air energy storage system as source of energy during the power transfer. The method has been proposed as techno-economical feasible solution to the problem. The elements of the proposed system their features and operation are given in this report. The process with the compressed air energy storage system has been simulated using MATLAB software and the results were presented. As a part of the project, prototype model has been designed and fabricated. All the elements of the prototype design are described in detail. The results of the operation of the prototype model have been presented and both simulation results and the results from the experiments have shown the proposed methods provide a solution to the existing problem of the factory.