Back-to-back HVDC (High Voltage Direct Current) is a configuration used to provide stable interconnection between two AC (Alternating Current) systems or grids. It consists of two HVDC converter stations placed in close proximity, with one station converting AC power to DC power and the other station converting DC power back to AC power. This setup allows for the transmission of power between two different AC systems, even when they operate at different frequencies or have different voltage levels.

The correct answer to the given question is option 'D', which states that back-to-back HVDC is used to provide stable interconnection. Let's understand why this is the correct answer:

1. Stable Interconnection:
- HVDC systems are known for their ability to provide stable interconnection between two AC systems. By using back-to-back HVDC, the two AC systems can be connected and synchronized, allowing for the exchange of power and maintaining stable operation.
- The HVDC converter stations in the back-to-back configuration help in controlling and stabilizing the power flow between the two AC systems. They regulate the voltage and frequency of the AC power, ensuring a stable interconnection.

2. Increase Transmission Capability:
- While back-to-back HVDC does not directly increase the transmission capability, it enables the transfer of power between two AC systems that may have different transmission capabilities. This allows for the utilization of surplus power from one system to meet the demand in the other system, effectively increasing the overall transmission capability.

3. Decrease Line Losses:
- Line losses occur when power is transmitted over long distances through AC transmission lines. HVDC transmission has lower line losses compared to AC transmission, as DC power experiences fewer losses due to factors like resistance and inductance.
- Although back-to-back HVDC does not directly reduce line losses, it facilitates the transmission of power between two AC systems, which might involve long-distance transmission. This indirectly helps to mitigate line losses.

4. Reduce Voltage Drop:
- Voltage drop is a phenomenon that occurs in AC transmission lines due to the resistance and reactance of the line. HVDC transmission has lower voltage drop compared to AC transmission, as DC power does not suffer from reactance-related voltage drop.
- Back-to-back HVDC does not directly reduce voltage drop, but it enables the transmission of power between two AC systems, which may involve long-distance transmission. This indirectly helps to minimize voltage drop.

In summary, back-to-back HVDC is primarily used to provide stable interconnection between two AC systems or grids. While it indirectly contributes to increasing transmission capability, reducing line losses, and minimizing voltage drop, its main purpose is to ensure a stable and reliable exchange of power between the interconnected systems.