SeaTwirl has created a vertical axis wind turbine (VAWT) that is both direct-drive and stores energy using seawater. It also uses water as a bearing, which has the advantage of low friction.
The generator is of the permanent magnet type. This means that it partially utilizes magnets (magnetic materials such as neodymium) to turn the rotor. The other type of generator (induction) utilizes electromagnets (coils of copper wire) completely.
When the wind speed decreases, the seawater that was drawn into the structure through the shaft and into the torus by centrifugal force is used to maintain turning momentum, acting as a flywheel. The turbine actually collapses its blades to reduce drag so it can spin as a flywheel and then generate as much electricity as possible.