A mismatch between the fuel combustion temperature similar to 2250 K (adiabatic) and the high pressure steam temperature up to 900 K, results in a large amount of thermodynamic losses in steam turbine (ST) cycles. A solid-state thermoelectric (TE) placed on top of a ST cycle will produce additional electrical power. By selecting the right materials for the TE generator for high temperature operation, the energy production from the same fuel consumption will increase. Recent nano-structured enhancements to the thermoelectric materials could provide practical performance benefits. We carried out a theoretical study on the optimization of the interface temperature connecting these two idealized engines for energy economy as a combined system. We also analytically studied the optimum point-of-operation between the maximum power output for minimizing the payback and the maximum efficiency to obtain the maximum fuel economy for each generator. The economic optimum ends up in a significant reduction in energy cost ($/kW h). The combined TE topping generator system provides a lower energy cost for any period of operational life and higher interface temperature compared to the ST cycle alone. The maximum power output is observed at around 700 K of interface temperature for 10,000 h of operation, while the minimum energy production cost from the combined system is observed at over 900 K with ZT = 1. (c) 2013 Elsevier Ltd. All rights reserved.