Abstract: The transmission of power from large-scale new energy base through long-distance DC transmission poses new challenges for increasing the capacity of modular multilevel converter (MMC). The utilization of negative voltage states (NVSs) by adding extra full-bridge submodules can extend the linear modulation range of MMCs and significantly enhance their achievable capacity. First, an approximate model of the NVS utilization method is established, revealing the influence of the NVS utilization coefficient on the designable value of the MMC's AC side rated voltage, allowing for a simple and rapid estimation of the capacity enhancement extent. Furthermore, an accurate analytical model considering the influence of capacitor voltage ripple effects, the second-order harmonic circulating current control, and the NVS utilization coefficient is developed.Meanwhile, based on the accurate analytical model, a three-layer iterative search parameter design method for the NVS utilization approach is proposed, which can achieve optimal design of key MMC parameters for different capacity design goals. Based on a case study involving capacity enhancement of a 5 000 MW MMC, the cost of MMCs under NVS utilization is analyzed. The results indicate that the economic range for NVS utilization is between 5 000 MW and 7 250 MW, within which the cost of NVS utilization method is the lowest among various capacity enhancement methods. Simulations were conducted to verify the correctness of the proposed analysis and design methods.