The Stirling engine was invented by one reverend Robert Stirling, a Scottish Clergyman in 1816 as a pumping engine to be used in mines. It used air at low pressure as its working fluid. It was inherently inefficient and bulky and was replaced due to lack of thermodynamic knowledge a whopping hundred and fifty years ago. However, in 1938, modern technology could help revive almost lost Stirling Engine Design by Philips, in the same year.
A Stirling engine is as shown below (courtesy answers.com):
The engine is unique in its operation, as in no gas or “working fluid" ever leaves or enters the engine. The working fluid is already present within the engine but is displaced back and forth within the cylinder by a working piston and a displacer. The engine has 4 strokes -- cooling, compression heating and expansion. This is made possible when the gas moves back and forth through the heat exchanger, which has a regenerator between the hot and cold heat exchangers. An external heat source ( a stove, a fuel burner, etc) is always in contact with the hot heat exchanger while the cold hat exchanger is always in contact with a heat sink ( fins are commonly used). This respective change in gas temperature causes change in gas pressure while the motion of the working piston either expands or compresses the gas.
A displacer, which acts as a second piston, is used to alter the proportion of the gas in the expansion and compression spaces. This is accomplished by a special crankshaft linkage and sliding piston rod arrangement. The movement of the displacer is timed t transfer the fluid to the compression space during the compression stroke of the work piston, and to the expansion space during the expansion stroke. In this way, heat is continually absorbed from the outside to the expansion end of the cylinder and continually rejected at the compression end, as you can see from the image above.
These engines required expensive materials, set-ups and technology to manufacture. Thermal efficiencies of more than 30% have been achieved but these engines have been heavy, bulky and expensive and hence these haven’t been commercialized. These engines did have high thermal efficient, multi-fuel capabilities and low exhaust emissions though.