A novel combined thermoelectric power generation and water desalination system is described with a system schematic. The proposed system utilises low grade thermal energy to heat thermoelectric generators for power generation and water desalination. A theoretical analysis presents the governing equations to estimate the systems performance characteristics combined with experimental validation. Experimental set-up consists of an electric heat source, thermoelectric modules, heat pipes, a heat sink and an evaporator vessel. Four heat pipes are embedded in a heat spreader block to passively cool the bottom side of the thermoelectric cells. The condenser of these four heat pipes is immersed in a pool of saline water stored in an evaporation vessel which is maintained at sub-atmospheric pressure. The liquid to vapour phase change cooling method achieve low saturation temperature and offers a high heat transfer coefficient for the cooling of the thermoelectric generators. At the same time this method utilises the low temperature heat extracted from the cold side of the thermoelectric generator for water desalination. It was observed that at low saturation temperatures greater heat flux could be supplied to the thermoelectric generators with less heat losses to the atmosphere. (C) 2015 Elsevier Ltd. All rights reserved.