SeaTwirl uses a vertical axis wind turbine to absorb the wind energy and a torus ring to store this energy. SeaTwirl uses the physical law for conservation of momentum to enable the storage capacity. When energy should be stored SeaTwirl transports fluids from a less rotationally centered position to a more rotationally centered position to rotate faster, as a skater doing a pirouette. In this way it can store large amounts of energy at low speed and tap it at higher rotational velocity when the demand for energy rises.
It basically functions as a flywheel does. If you want a more thorough explanation, here's a video made by the company:
Some of the info on SeaTwirl's site is a bit sketchy, so I emailed the company's owner/inventor, Daniel Ehrnberg, for some clarifications. He said that the ability to scale up to a massive turbine—listed as a 10-megawatt rating capable of storing 25 000 kWh—is still actually a ways off (four to six years, according to Erhnberg). The biggest prototype made so far was at 1:50 scale, but he told me he is "convinced that the larger SeaTwirl units will have a much better cost-effectiveness than today's technology." He said it is "hard to say" what a full-scale device will actually cost to build.
Ehrnberg also said SeaTwirl plans to use undersea cables that are already in place to bring the power back to shore, at least for the early prototypes. The big advantage to something like this lies in the storage capability: by sending the stored power to the grid only at times of higher demand or lower wind speeds, the technology averts one of the most common renewable energy pitfalls—or at least diminishes it. As offshore wind continues to ramp up in Europe and we get closer to the first turbines in U.S. waters, this is something to keep an eye on.
(Image and video via SeaTwirl/Daniel Ehrnberg)