The vegetable oil is burned to power the generator and the waste heat from this process is then used to provide heating and hot water and also converted to cool a fridge.
The scientists claim that as the plants grown to produce the vegetable oil absorb carbon whilst growing, the whole process results in near zero carbon emissions.
One of the potential oils to be used in the system comes from the seeds of the Croton Megalocarpus plant in East Africa and the researchers say it can be grown on land not suitable for traditional farming or food crops.
The £1.1m project is a joint UK-China research programme funded by the Engineering and Physical Sciences Research Council.
The design includes an energy storage system, being developed with Leeds University, that allows home owners to store extra electricity during off-peak times, which can be released when it is needed.
Using modelling expertise of scientists at Ulster University, the research team will now build a full-scale prototype of the domestic combined heat and power system.
Project leader Professor Tony Roskilly, of Newcastle University, explains:
“The supply of electricity, heating and cooling can be optimised by this one, efficient and sustainable system. The combination of the generator and energy storage provides new ways to respond to changing energy demand in the home.”