The multiscalar challenges associated with urban energy policies are the cause of extensive interaction among multiple levels of government and social forces. However, these multilevel systems of action tend to reflect complex and unstable power and resistance patterns rather than stable co-operation processes. Thus, in this paper, a multilevel governance perspective is used as a starting point for understanding where and how multilevel interactions arise in an energy system as well as which issues are creating political conflict and the related consequences for the governance of urban energy policies. This approach is illustrated through a case study of Cape Town, which exemplifies a situation of conflicting policy and agendas at different levels of government, thus creating a great dispersion of initiatives across different scales. Integrating these initiatives within a broader coherent framework, however, is not only a technical matter. As urban energy policies deal with multilevel issues, they imply negotiating dynamic and complex compromises between different types of organisations and authorities while shaping their governance is also a matter of politics.