diff --git a/code/modules/power/generator.dm b/code/modules/power/generator.dm
index 5a9420591d0f..3fff4e5159fd 100644
--- a/code/modules/power/generator.dm
+++ b/code/modules/power/generator.dm
@@ -13,6 +13,9 @@
 	var/lastgen = 0
 	var/lastgenlev = -1
 
+	var/internal_heat_cap = 1000 //needs experimantal data
+	var/internal_temp = T0C
+
 /obj/machinery/power/generator/Initialize(mapload)
 	. = ..()
 	find_circs()
@@ -45,6 +48,8 @@
 			add_overlay("teg-panel")
 		return
 		
+	if(!powernet)
+		add_overlay("teg-nogrid")
 	if(stat & (NOPOWER))
 		return 
 	else
@@ -60,27 +65,36 @@
 		return
 
 	if(powernet)
-		var/datum/gas_mixture/cold_air = cold_circ.return_transfer_air()
+		var/datum/gas_mixture/cold_air = cold_circ.return_transfer_air()		//circulators give us air that is moving through
 		var/datum/gas_mixture/hot_air = hot_circ.return_transfer_air()
 
 		if(cold_air && hot_air)
 
-			var/cold_air_heat_capacity = cold_air.heat_capacity()
-			var/hot_air_heat_capacity = hot_air.heat_capacity()
+			var/cold_air_heat_cap = cold_air.heat_capacity()	// not sure if this isnt pointless
+			var/hot_air_heat_cap = hot_air.heat_capacity()
+
+			var/cold_temp = cold_air.return_temperature()
+			var/hot_temp = hot_air.return_temperature()
 
-			var/delta_temperature = hot_air.return_temperature() - cold_air.return_temperature()
+			if((hot_temp - cold_temp) > 0 && cold_air_heat_cap > 0 && hot_air_heat_cap > 0)
 
+				//air moving trough equalises temperature with it subsection
+				var/cold_subsection_temp = (cold_air_heat_cap * cold_temp + internal_heat_cap * internal_temp) / (internal_heat_cap + cold_air_heat_cap)	
+				var/hot_subsection_temp = (hot_air_heat_cap * hot_temp + internal_heat_cap * internal_temp) / (internal_heat_cap + hot_air_heat_cap)
+
+				hot_air.set_temperature(hot_subsection_temp)	// cooled / heated air gets spit back out
+				cold_air.set_temperature(cold_subsection_temp)
 
-			if(delta_temperature > 0 && cold_air_heat_capacity > 0 && hot_air_heat_capacity > 0)
 				var/efficiency = 0.65
 
-				var/energy_transfer = delta_temperature*hot_air_heat_capacity*cold_air_heat_capacity/(hot_air_heat_capacity+cold_air_heat_capacity)
+				//how much energy do we have stored in temperature differetial
+				var/energy_transfer = (hot_subsection_temp - cold_subsection_temp)*internal_heat_cap
 
-				var/heat = energy_transfer*(1-efficiency)
+				//produce electricity
 				lastgen += energy_transfer*efficiency
 
-				hot_air.set_temperature(hot_air.return_temperature() - energy_transfer/hot_air_heat_capacity)
-				cold_air.set_temperature(cold_air.return_temperature() + heat/cold_air_heat_capacity)
+				//transfer rest of energy into waste heat/chill
+				internal_temp = cold_subsection_temp + energy_transfer * (1 - efficiency) / (internal_heat_cap * 2)
 
 				//add_avail(lastgen) This is done in process now
 		// update icon overlays only if displayed level has changed
@@ -93,7 +107,7 @@
 			var/datum/gas_mixture/cold_circ_air1 = cold_circ.airs[1]
 			cold_circ_air1.merge(cold_air)
 
-		update_icon()
+	update_icon()
 
 	src.updateDialog()
 
@@ -279,4 +293,4 @@
 /obj/machinery/power/generator/obj_break(damage_flag)
 	kill_circs()
 	..()
-	
\ No newline at end of file
+	
diff --git a/icons/obj/machines/thermoelectric.dmi b/icons/obj/machines/thermoelectric.dmi
index 3e0f5d5fdcca..29c526bfa168 100644
Binary files a/icons/obj/machines/thermoelectric.dmi and b/icons/obj/machines/thermoelectric.dmi differ