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The permissible current-carrying capability of power cables has been calculated on the basis of installing in the homogeneous materials as the same thermal resistivity. But, in case of installing power cables surrounding dissimilar soil thermal properties, the gradient of temperature will be occurred not only the radial heat flow but also longitudinal heat flow along the power cables. So there are many problems at calculating the permissible current-carrying capability in convenient method. This paper presents the heat model and algorithms of the longitudinal heat flow along power cables to analyze the temperature distribution and the derating factor of the permissible current-carrying capability of power cables. The algorithm is derived from two dimension Fourier's law and energy balance equation using heat conduction equation of heat transfer. The analysis of derating factor of the permissible current-carrying capability of power cables is derived from the algorithm and equation proposed by IEC 60287. The proposed heat model and algorithm are programmed to analyze the hotspot of power cables using the graphical user interface technique. This program is of great use to reasonably calculate the permissible current-carrying capability of power cables and to operate underground power systems in more stable and reliable.