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This paper presents design and control methods for fault-tolerant operations with redundant converter modules, one of the most prominent features in modular multilevel converter (MMC) topology. In fully implementing MMC functionalities, a nearest level control is applied as a low-switching modulation method. A dual sorting algorithm is newly proposed for effectively reducing the switching commutations of each power module as well as for voltage balancing control. Built upon these primary MMC topological and control features, its redundant operation is comprehensively investigated for fail-safe energy transfer. In particular, a novel spare process is proposed to handle an emergency situation when the number of faulty power modules exceeds the module redundancy. Since topological redundancy may cause the switching commutations of power modules in an arm to be unevenly distributed, a practical and effective mitigation measure is incorporated to keep the energy balance while avoiding the undesired switching stresses. Rigorous simulation studies for MMC and its application for high-voltage direct current are performed to demonstrate the validity and effectiveness of the proposed spare process under normal and emergency conditions.