Efficiency – How Efficient is a Thermoelectric Generator?

Efficiency may not be the appropriate metric, if you are interested in comparing large-scale power sources.

The efficiency of a solar panel is the ratio between the electrical output and the incident solar energy. If we know the average characteristics of sunlight in a given area, the efficiency allows us to calculate the output power for a given panel area (or vice-versa). The efficiency allows a useful comparison between two solar panels, but doesn't help us make a comparison between e.g. a solar installation and a wind farm.

The closest equivalent figure for a turbine installation might be the generator efficiency - the ratio between the electrical output and the mechanical energy extracted by the turbine. But the mechanical energy extracted by the turbine is only a teeny tiny portion of the total mechanical energy that could theoretically be extracted if the turbine was unconstrained by physical or practical considerations. In this sense, a wind farm's efficiency is very low. But generating power from the wind turns out to be economical nonetheless. We don't have to extract a large percentage of the available energy to make it worth it.

Thermal generators are similar in this respect - they are not efficient in the sense that they make use of a minuscule percentage of the power that could be theoretically be extracted from a given thermal gradient. But that doesn't tell us much about whether they could be useful for meeting our power needs, or how they compare to other power sources. That sort of question would require a much more in-depth analysis that accounts for cost, environmental effects, etc.

To understand the potentials and limitations of thermoelectric generation, you would need to start by identifying the thermal gradient serving as the source. Is it geothermal? Is it waste heat from another process? Once you have a source, you can start to quantify the available energy. Only then does the efficiency come into play, along with cost, maintenance requirements, portability, reliability, and so on.

I get the feeling your question was in the context of grid power. To my knowledge, TEGs are not a major competitor to e.g. solar or wind power in this arena. TEGs are used to extract energy from very high thermal gradients, of which few are renewable and naturally occurring. Geothermal gradients are exploited in some cases as a renewable source of substantial power, but TEGs are not the best technology to extract this energy because the gradients occur over a large distance.

Of course, a TEG could be used to generate electrical energy from a thermal gradient generated by burning a fuel - this is actually done in some cases. But here, the very low efficiency of TEGs makes them uncompetitive with mechanical generators on a large scale.