The study proposes a new airborne wind energy system based on the carousel concept. It comprises a rotary ring kite and a ground-based rotating reel conversion system. The moment generated by the ring kite is transferred by several peripheral tethers that connect to winch modules that are mounted on the ground rotor. A generator is coupled to this rotor for direct electricity generation. Because the ring kite is inclined with respect to the ground-rotor the length of the peripheral tethers has to be adjusted continuously during operation. The proposed system is designed to minimize the used land and space. This first study describes the fundamental working principles, results of a small-scale experimental test, a kinematic analysis of steady-state operation of the system and a power transmission analysis. Design choices for the ring kite are discussed, a strategy for launching and landing and methods for passive and active control are described.