A simulation based assessment is made of the benefits of using advanced modulation formats including Pulse Amplitude Modulation (PAM) and Carrierless Amplitude/Phase Modulation (CAP) to ease laser control requirements of a recently proposed novel uncooled Multiple-input and Multiple-output (MIMO) Wavelength-Division Multiplexing (WDM) system. At a per channel bit rate of 25 Gb/s, the spectral efficiency improvements inherent to these schemes provide additional optical system power margin over NRZ modulation (0.4 dB for PAM-4 and 4.4 dB for CAP-16) for a link distance of 20 km. This allows the minimum channel spacing between channels to be reduced from 0.4 nm (NRZ) to 0.3 nm for PAM-4 and to 0.14 nm for CAP-16, this in turn allowing for a more stable operating region to be realised. Compared with a traditional 16 x 25 Gb/s DWDM system, a power consumption saving of 30% can be realised using NRZ while PAM-4 and CAP-16 offer 29% and 27% savings respectively.