Let’s take a little ride on the Atmospheric Vortex Engine bandwagon. It might not go very far, this scheme to create an air vortex in a big tower to spin turbines to produce electricity, but $300,000 from Silicon Valley investor-billionaire Peter Thiel’s Breakout Labs says it’s getting a shot.

The concept is a close cousin of the solar updraft towers (which we’ve been admittedly weirdly enthusiastic about), relying on convection to move air. But whereas those projects would use solar collectors of some sort as the heat source, the brainchild of inventor Louis Michaud wants to grab waste heat from, say, a thermal power plant and channel it into a powerful swirl of energy.

Why not? he figures. Thermal power plants already have cooling towers, sometimes whisking away heat using fans, which uses energy, or relying on natural draft, which saves energy but can be more costly to build.

Michaud says his concept would be the best of both worlds – cheap as using fans while not just saving energy, but producing it.

“The AVE uses low-temperature waste heat to create a tornado-like atmospheric vortex,” Michaud, based in Sarnia, Ontario, said in a statement [PDF]. “In contrast with a real tornado, the vortex can’t go anywhere because it is anchored to its heat source. So it is really more like a dust devil or waterspout, and it serves as a low-cost virtual chimney.”

Although this is the first we’ve heard of it, Michaud’s vision has apparently been kicking around for a while. He said that back in 2009 he and his cohorts built a prototype that was about 13 feet in diameter, and it worked.

The goal with the $300,000 is to bump the concept up in size – the chimney would be around 26 feet in diameter and 130 feet tall – at Lambton College in Ontario.

But Michaud eventually wants to go much bigger than that, envisioning towers several hundred feet in diameter.

“The real prize will be using a large scale AVE to drive turbines,” Michaud said. “Using the low temperature waste heat from a 500 MW thermal power plant could generate an additional 200 MW of power, increasing capacity by 40 percent and producing perfectly green electricity at less than three cents per kilowatt hour.”

Now, it should be noted that Michaud isn’t the first guy to imagine recovering heat and using it to produce electricity. In fact, there are machines that will do just that (see this from GE). What Michaud is promising is efficiency, scale and, ultimately, payback that can’t be beat. We’ll see.

See the full roster of cutting-edge projects funded by Breakout Labs here.