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A thermoelectric device uses temperature difference between two different metals or alloys to generate electricity. It is an old technology, discovered by German Thomas Seebeck in 1821.
The effect - known as the Peltier-Seebeck effect - can be used to power thermometers, and also solid state energy sources. If enough of these devices can be placed around a heat source, electricity flows.
Uses are in cars, where the high heat of the exhaust is wasted. If the alternator on a car or lorry can be replaced by thermoelectrics, a 5% petrol or diesel consumption can be made. Cars use more electricity to power all the gadgets inside, so significant savings can be made.
BMW and GM are researching this now and hope to gain a 10% increase in fuel efficiency. Japan is investing in them and hopes to save 20 million gallons of crude oil by 2010 by replacing powered devices with thermoelectrics.
Thermoelectric coolers and thermoelectric cooling have very efficient use of power and will be covered in a new article.