Underground power cable systems (UPCSs) are generally buried close to the ground surface, exposing them to significant influences from ambient air and ground temperatures, which can affect heat dissipation and thermal efficiency. This study compares the heat transfer performance of UPCS with different cable bedding materials at critical current carrying capacity, considering the effects of ambient air and ground temperatures on system performance. The findings indicate that current carrying capacity decreases with higher ground temperatures, and that the critical ampacity leading to maximum cable temperature in UPCS is significantly influenced by actual ambient air and ground temperatures, rather than standard reference values like 20 °C. The newly developed cable bedding material, prepacked aggregate concrete (PAC), to enhance heat dissipation efficiency and prevent cable overheating is also proposed. Experimentally, PAC, with a higher thermal conductivity of 2.094 W/(m·K) versus 1.365 W/(m·K) for sand, lowers the maximum cable temperature to 70.6 °C, compared to 77.6 °C for sand under critical conditions. Moreover, the analytical solutions for ground temperature distribution models as boundary conditions are also highlighted, in which steady-state ground temperature analysis at the relevant depth may impact the accuracy of cable temperature predictions related to UPCS operation for both the system itself and the surrounding earth materials. © 2024