Analyses of local climate change governance and sustainable energy transitions have tended to focus on understanding broader governance networks, within which local governments are important actors. Such approaches often make appeals to (lack of) capacity when seeking to understand the many limits to local sustainability programmes, however local government capacity is rarely given a primary analytical focus. We offer a definition of local government sustainable energy capacity, organise it into six types, and explore it in relation to contextual factors across scales: political institutions; energy and climate change policies and material aspects of energy systems. This heuristic framework is applied to case studies of eight local and combined authorities in England, a country with particularly centralised political institutions and energy systems. We conclude that capacity is a useful lens through which to explore the extent to which, and importantly how, local governments can become active sustainability actors. We also find that the development of knowledge capacity is becoming increasingly important; that there is some evidence of political re-scaling in energy; and identify some ways in which material aspects of energy systems have significant implications for local government sustainable energy capacity.