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Cross border capacity allows electric energy to be traded internationally. The electricity sector used to be vertically integrated and often state-owned. High voltage grids were generally developed within the borders of a country. Connecting different national high voltage grids was done to improve the security of the system and to accomodate for a few historical long term contracts. By doing so, the different systems could share their reserve generation capacity. Since the liberalization of the electricity sector, cross border capacity has gained a renewed interest as this can increase the competition in the market. This paper aims to give an overview of recent and planned investments which increase the cross border capacity of Belgium. Also we give an insight into the different technologies which can be used and their advantages and drawbacks are discussed.

This paper studies strategic incentives to invest in electricity generation capacity using a local fuel like renewables or coal. It shows that investing in this capacity, even if not used, improves the bargaining position of a power producing firm that also imports another fuel such as gas. When several importers are considered, the paper finds that investment has a positive strategic effect on all other importers' bargaining position. A government energy policy that forces utilities to invest in capacity based on particular fuels can be justified not only for environmental but also for strategic reasons.