The compression/heating effect of air (that's how diesel engines ignite the fuel) can cause frost problems on the use or decompression side, and may also reduce real world efficiency.
Let's say you compress a gas to 500 psi. It takes a lot of
energy to do that, and it's not -really- 500 psi because some of the increased pressure comes from the increased temperature. The increased temperature -will- go away, either as the tank cools off if you're saving it for later, or on the expansion cycle when you immediately use the compressed hot air. As the cooling occurs, you lose some of the apparent pressure as well.
Compressed air as a medium to transmit power is pretty lossy, primarily from the friction/piping losses, and secondarily from the heating/cooling effects on the real temperature/pressure.
That doesn't mean compressed air isn't useful and worthwhile, it gets used for a ton of things. It's just not super efficient at transmitting energy. If you have a method to produce compressed air cheaply and efficiently, the whole world will be interested.
As an exercise, I once did some back-of-the-napkin calculations to use some of the waste heat from the hot end of a big compressor using TEGS (Thermo Electric Generator units). The resultant electricity was (as I recall) well over three dollars per kilowatt hour.
So, while my idea was novel, and would "work", it wasn't useful. I hope yours has far better math than mine did.