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Carnot Efficiency describes the theoretical limits. If we had a *perfect* heat engine, it would have a Carnot efficiency of 100%. This is not the same as thermal efficiency, which is almost always much lower than the ideal Carnot efficiency. There is, of course, no such thing as a perfect heat engine.

The Carnot cycle can be thought of as the most efficient heat engine cycle allowed by physical laws. When the second law of thermodynamics states that not all the supplied heat in a heat engine can be used to do work, the Carnot efficiency sets the limiting value on the fraction of the heat which can be so used.

In a power generation application, for any given hot side and cold side, there is a maximum amount of energy which can be extracted. This amount is the maximum Carnot efficiency. It means that, for example, the larger the temperature difference between a hot and a cold side, the more power can be extracted.

For comparison purposes, a typical thermoelectric (Peltier device) generator has a Carnot efficiency of about 5-8%. A Rankine cycle generator, such as a gas turbine, has a typical Carnot efficiency of about 30%, while a diesel or gasoline generator is only about 10-15% efficient in Carnot terms. Power Chips are projected to achieve 70-80% of Carnot efficiency.

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