Conversion of temperature differences into electrical voltage and vice versa is known as thermoelectric effect. A thermoelectric device generates voltage when there is a temperature difference on each side. If a voltage is applied, it generates a temperature difference.
In 1834, Peltier discovered that when an electric current is passed through a circuit of a thermocouple, heat is evolved at one junction and absorbed at the other junction. This is known as Peltier effect.
In the Cu-Fe thermocouple the junctions A and B are maintained at the same temperature. Let a current from a battery flow through the thermocouple (Figure 2.36 (a)). At the junction A, where the current flows from Cu to Fe, heat is absorbed and the junction A becomes cold. At the junction B, where the current flows from Fe to Cu heat is liberated and it becomes hot. When the direction of current is reversed, junction A gets heated and junction B gets cooled as shown in the Figure 2.36(b). Hence Peltier effect is reversible.