Law No. 19.940 modifying the General Electrical Services Law (LGSE) of 1982

The law reformed the LGSE, changing several aspects of the energy generation market in Chile that affected all forms of energy generation, but included special provisions for Non-Conventional Renewable Energy sources (NCREs), defined as wind, hydropower installations up to 20MW, biomass, biogas, geothermal, solar and tidal energy. The reform opened up the spot market and guaranteed the right to be connected to the country's power grids to small generating plants, many of which fall into the NCRE category. This move increased commercial and generating opportunities for these small producers.

In addition, the reform exempted projects using NCREs from paying transmission fees, using a differentiated scale—one for plants generating up to 9 MW and another for those generating between 9MW and 20MW. In addition to benefiting those sources, this exemption serves to recognise a positive externality, given their low impact on transmission grids and on invest-ments associated with their expansion.