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In this paper thermal analysis and ampacity evaluation of underground power cables that are placed in Tunnel are presented. A Streamline-upwind/Petrov-Galerkin (SUPG) stabilized finite element method is proposed to solve the air governing formulations in the region between the cables and the retaining tunnel in the underground power transmission system. In thermal analysis, a nonlinear-coupled electromagnetic-thermal model of underground cables and the radiation heat exchanges between external cables surface and internal tunnel surface is proposed. The analysis reveals that the convection induced heat exchange is much stronger than the conduction induced heat exchange in the air between external cables surface and internal tunnel surface. At last, Newton-Rahpson iteration method is used to evaluate the cable ampacity.