Chile has a limited exploitation of it's domestic energy resources. As a result, the country must import the bulk of its energy needs. Chile's growing reliance on energy imports, particularly on natural gas, has not been without consequences. In April 2004, Argentina began restricting natural gas exports to Chile, with cuts reaching nearly 50 percent of contracted volumes on some days. Chile, in turn, began to reconsider its energy policy, which, prior to the import restrictions, had assumed an increased use of natural gas and power imports from Argentina. Most importantly, Chile has begun to pursue other sources of natural gas, such as liquefied natural gas (LNG) or piped gas from other countries.

The sustained growth of the Chilean economy of around 6.3% over the past years has implied a continuous growth in energy demand in the country. This has led to the saturation of the capacity of the largest national grid, the Central Interconnected System, or the "SIC". On the other hand, the real growth of mining installations in the northern regions of the country, probably the largest mining and mineral exploitation zone in the world, together with the projected investments in this sector (estimated at US$9,600 million before 2008), mean an enormous demand for energy in the next few years. This implies a rapid growth in the activity of energy generation for this zone, and the supply from the Northern Interconnected System, or "SING".

The relation between Chilean energy demand versus installed capacity and the insecurity in the production of electrical energy has required the Government to make concrete efforts to stimulate the sector, especially to all renewable energies, as well as the stimulation of large projects focusing on the sectors of hydroelectricity and cycle combined thermoelectric. In the next few years an increase of 5.4 GW of generation is expected in the SIC. This will not be free of problems due to the natural resistance to the use of the large water-bearing reserves of the rivers in the south of the country, together with the instability of natural gas supplies, which have been severely damaged by the latest actions of the Governments of neighboring countries, Argentina and Bolivia, possessors of large natural gas resources but whose supply is not guaranteed for Chile.

The Government of Chile backs a rapid increase in the capacity of growth in the supply of non-conventional renewable energies, especially mini-hydro, wind, solar, geothermal and biomass, without discarding other sources, anticipating to attract investments that will mean installations of no less than 500 MW before 2009.