Propelled by a $2.7 million grant from the U.S. government, General Motors Co. researchers will study how to capture engine exhaust and convert it to mechanical energy that could charge a hybrid’s battery or perhaps eliminate the 50-year-old alternator.

GM will use the money to build a prototype using a shape-memory-alloy that generates electricity from the heat of engine exhaust. When a stretched length of SMA wire is heated, it shrinks back to its pre-stretched shape. When it cools, it becomes less stiff and can revert back to its original shape.

GM researchers think a loop of SMA could be used to drive an electric generator to charge a battery, performing basically the same task as the engine alternator, which auto makers began adding to vehicles in the 1960s. GM stops short of identifying a vehicle that could use the technology but says it could be in future hybrids or traditional cars and trucks.

“No one else anywhere in the world is doing this work as far as we know,” says Jan Aase, director of GM’s vehicle development laboratory in Warren, MI, in a statement announcing the grant.

“In a hybrid system, the electrical energy could be used to charge the battery. In a conventional engine, this could perhaps even replace the alternator without any load on the engine.”

Aase says GM currently is working with a network of researchers experienced in SMAs and calls it a “high-risk, high-return project.”

GM says the project reflects a new age in research, where the auto maker can no longer do groundbreaking work on its own but must partner its deep technical knowledge with others that can take its ideas from concept to commercialization.

Joining GM on the project are HRL Laboratories LLC, a Malibu, CA- based physical science and engineering research outfit formerly known as Hughes Research Laboratories; Dynalloy Inc., a maker of SMAs for use as actuators out of Tustin, CA; and the Smart Materials Collaborative Research Lab at the University of Michigan in Ann Arbor.

Aase says the idea of a heat engine has been around for years, but the few devices built were either too large or too inefficient to be worthwhile. GM and its partners will work on the early-stage project over the next two years.

Funding comes from the U.S. Department of Energy’s Advanced Research Program Agency, which is distributing $151 million in grants. GM is the only auto maker so far to receive money.

Another $2.5 million grant goes to Michigan State University, which will research wave disc engine technology. The gas-fueled engine is an estimated five times more efficient than traditional motors for generating electricity, and could be used to replace current generators for plug-in HEVs.