Power oscillation damping (POD) is one of the ancillary services expected from high-voltage direct current (HVDC) converters. When providing POD to the ac side, converters draw power from the dc side, which can cause distortion to the dc voltage especially in the case of limited dc capacitance. In meshed/multi-terminal HVDC grids, where dc voltage regulation is distributed using a dc voltage droop control strategy, the distortion due to the POD controller action is propagated to other connected ac grids because of the droop action. This propagation can be reduced by using the inherent energy storage capability of the modular multilevel converter (MMC), which is a common converter topology for HVDC. Different methods to utilise the energy stored in the MMC for the purpose of POD have been proposed in the literature. This study presents a detailed analysis and experimental validation of one of these methods, referred to as virtual capacitance support, which increases the effective dc grid capacitance by using the stored energy of multiple MMCs connected in the same grid. The experiments, which were carried out using power hardware in the loop setup, demonstrated the effectiveness of the method.