The capacity of Modular Multilevel Converter（MMC） is mainly limited by the current rating of power semiconductor devices. An applicable approach is to enhance the capacity of MMC with the third harmonic injection method. First

we analyzed the influences of third harmonic injection on the steady state of MMC system

including the influences of circulating current suppression on the peak value of fundamental frequency voltage and the harmonic characteristics of sub-module capacitor voltage. Then

we analyzed the influences of third harmonic injection on the transient state of MMC system after taking DC faults as an example. Finally

we established a model of the Zhangbei four-terminal DC grid based on MMC in PSCAD. All the theoretical analyses were validated by the simulation results. The results show that the third harmonic injection positively affects the suppression of fault current and enhancement of capacity. Nevertheless

the improvement of power transmission capacity is limited by the circulating current suppression.