In this case, the new alloy — Ni45Co5Mn40Sn10 — undergoes a reversible phase transformation, in which one type of solid turns into another type of solid when the temperature changes, according to a news release from the University of Minnesota. Specifically, the alloy goes from being non-magnetic to highly magnetized. The temperature only needs to be raised a small amount for this to happen.
When the warmed alloy is placed near a permanent magnet, like a rare-earth magnet, the alloy’s magnetic force increases suddenly and dramatically. This produces a current in a surrounding coil, according to the researchers, led by aerospace engineering professor Richard James.
One possible application for this alloy is in automobile exhaust pipes, which vent a lot of heat that could be recycled into electric power for the battery. Read more at Popsci. http://www.popsci.com/technology/article/2011-06/new-alloy-can-convert-heat-directly-electricity -via reddit
However, it may perform (one of) the functions of piezoelectrics, which can either convert electrical energy into mechanical, or vice versa. (Not as a generator---you put voltage across it, and it bends, or you bend it, and it generates voltage.)
Now, if it already was converting heat into mechanical energy (e.g., by changing size or shape), then ...