Abstract-The modular multilevel converter (MMC) has become a very attractive solution for interfacing high voltages in hybrid networks. The MMC enables scalability to different power levels, full controllability provided by IGBTs and can achieve very high efficiencies by using a low switching frequency method as the nearest level modulation. However, the nearest level modulation requires a capacitor voltage balancing algorithm, which can result in unbalanced loading for the power semiconductors in the different submodules. Particularly at low power factor operation, which could occur in case of low-voltage ride through and of reactive power injection, the conventional algorithm is not effective anymore. This article provides thermal stress analysis of the MMC in operation and proposes a thermal balancing approach, which is embedded in the capacitor voltage balancing algorithm. The purpose of the thermal balancing is to achieve similar stress distribution among the different submodules to enhance the lifetime. The junction temperatures in the different submodules are studied for HVDC applications and the article proves experimentally, that the thermal balance within the submodules is significantly improved.