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As compared with the rest of the region, in Chile the cost of electricity is currently high. As a consequence of the restrictions on the delivery of Argentine gas since 2004 and the inadequate volume of hydro and thermal power projects, diesel has become a significant energy source for generating electricity, which has markedly raised costs. (...)

Within the context of this new energy agenda, the Ministry has set itself several specific energy challenges for the next five year period. The more important of these include: (…) (c) implementation of the provisions of Law No. 20.698 of 14 October 2013, which encourages the expansion of the energy matrix by means of non conventional renewable sources and increased from 10% to 20% the target for the share of Non Conventional Renewable Energies (NCRE) in total domestic energy consumption by 2025. [72] To achieve this target, the Ministry has set itself the goal of ensuring that 45% of the generating capacity installed in Chile in the period 2014 2025 comes from these sources; (d) promotion of the efficient use of energy through the implementation of the Energy Efficiency Agenda (EE), which will permit savings of 20% by 2025; (...)

[72] Article 150bis, Law No. 20.698 of 14 October 2013, promoting the expansion of the energy matrix by means of non conventional renewable sources.

The authorities are developing legislation to promote energy efficiency. In March 2015, the Interministerial Energy Efficiency Committee, which incorporates officials from nine ministries, was preparing a draft law along these lines which it was hoped would be ready by the fourth quarter of 2015. According to the Ministry of Energy, among other efficiency measures, the draft would include detailed regulations for developing net metering. [74]

[74] Net metering is a scheme by means of which a customer who generates his own electricity can offset energy balances instantaneously or on a deferred basis. Net metering is used mainly by consumers who generate small amounts of renewable energy (generally wind or solar) and allows the surplus produced by a self generating system to be fed into the grid and used at another time, thus enabling users to generate their own power stably, without exposing themselves to a supply shortage in the event of a fall in output.

(…) A concession application is not a mandatory requirement for undertaking generating activities, although it usually facilitates the process. As in other industries, electrical projects are subject to approval by the environmental agencies.

(…) The requirements of the national environmental regulations prevent the marketing of some production surpluses such as those of less refined fuel, which are exported by ENAP (National Petroleum Company). In 2013, these exports amounted to 1.6 million cubic metres.

The Chilean legislation offers tax incentives to companies that opt for NCRE (Non Conventional Renewable Energies). Law No. 20.365, published on 19 August 2009, established a tax benefit for construction companies that choose solar heating systems for providing hot water for sanitary use. Any company that invests in these systems for building housing will be able to deduct a credit equivalent to all or part of the value of the system installed plus the installation costs. This deduction is made from the mandatory provisional payments of income tax.

Through the Ministry of Agriculture's Fund for Agricultural Innovation (FIA), in 2014 the Government launched a project of encouragement and support for the development of NCRE (Non Conventional Renewable Energies) aimed at the agro food and forestry sector, with a view to improving its competitiveness and productive and economic efficiency. The mechanism offers co financing for projects for investing in energy self sufficiency technologies, on condition that they are based on NCRE and the energy is intended for improving production systems already in operation. The co financing may vary between 20% and 65% of the total amount invested (depending on the beneficiary's annual sales volume), with an approximate and non repayable maximum of US$200,000.

Table A2. 2 Overview of Chile's regional trade agreements that entered into force between 2009 and 2014
CHILE - COLOMBIA Trade Agreement
Other provisions: Investment; transparency; current payments and capital movements; exceptions; dispute settlement; government procurement; electronic commerce; labour issues; environmental issues; cooperation.

CHILE – HONG KONG, CHINA Trade Agreement
Other provisions: Government procurement; competition policy, environment, transparency; dispute settlement.

CHILE - MALAYSIA Trade Agreement
Other provisions: Transparency; exceptions; intellectual property rights (recognition of geographical indications); cooperation; environment; dispute settlement. Within two years from the entry into force of the Agreement, the Parties shall begin consultations on the inclusion of a chapter on services and a chapter on investment. Future negotiations on financial services are also envisaged.

(…) Public expenditure on agriculture continues to be targeted mainly at irrigation, soil reclamation, rural development, land management and financing. (…)

Table A4. 1 Selected agricultural support programmes
4. SOIL RECLAMATION
- Programme: System of Incentives for the Agri Environmental Sustainability of Agricultural Land (SIRSD S)
- Description: Non repayable co financing of 50% to 90% of the net costs of agricultural soil reclamation activities for small scale farmers cultivating a maximum of 12 basic irrigation hectares whose assets do not exceed 3,500 UF.
- Regulatory framework: Law No. 20.412 of 09.02.2010;
Supreme Decrees No. 51/2012, No. 04/2013 and No. 83/2010.

- Programme: Incentive payments for forestry development
- Description: Financing for reforestation and soil reclamation with emphasis on smallholders.
- Regulatory framework: Decree Law No. 701 of 1974.

- Programme: Native Woodland Management
- Description: Financing of the costs of lumber, non lumber and conservation activities.
- Regulatory framework: Law No. 20.283 of 30.07.2008.