Best I can glean from the reports air is circulated through the sand and then a heat-exchanger to heat water to feed the community heating system ... presumably using water direct on 500°c sand would be a bad idea and defeat the object of being a largely passive system without the complex engineering of superheated steam turbines etc.
Makes perfect sense that if your big need is for energy in the form of heat that you don't go swapping through different energy forms .... just turn excess power into heat and store it like that, then use it direct.
Not a new idea by any means ... can remember 35 years ago when I was setting up off grid the use of stacked matt-black 50 gallon drums of water or a big thick stone wall behind a south facing glazed wall being used in the same way (heated by the sun during the day then then giving up it's heat to the house during the cooler night ... either passive or fan assisted .... worked best for the old hippies in New-Mexico ... and still seen in the 'earthship' houses there today.)
Everything else is just media hype and the poor levels of science education amongst our journalists.
K