New scenario of the non-conventional renewable energies on Chile after the incentives created on the “Short Law I”

Non-conventional renewable energies have never played an important role in the Chilean energy generation system, mainly due to the economic barriers that actually exists on our country for the inclusion of these kinds of technologies. Nevertheless, the use of renewable energy system technologies have started to be an interesting issue for the Chilean government, and for that reason, the last modification of the Energy Law during 2004, usually known as “Short Law I”, introduced the first direct incentive to renewable energy generation (specifically in the art. 71-7).In this work we analyze in detail the modification on the electric law we mentioned before, especially for geothermal and wind power generation, and we compare the economic incentive generated with the new law and the differences between the real energy costs using renewable energy systems technologies and the current energy price in Chile. It is clear from the analysis that the total incentives do not cover more than 8.3% of the price differences between incomes and costs.