Sustainable urban development projects play an important role in translating broad sustainability ambitions into context-specific actions through planning practices. However, many projects face an implementation gap between initial goals and realised outcomes. Explanations often highlight fragmented governance, regulatory constraints, shifting responsibilities, and weak continuity across planning phases. Experimentation – through pilot projects, demonstration projects, and living labs – has emerged as a strategy to address these challenges by developing and improving planning instruments, governance arrangements, and sustainability outcomes. This thesis examines how energy policies are implemented over time in sustainable urban development projects, focusing on how local governments and developers build institutional capacity. Using Healey’s framework of institutional capacity building, it investigates how actors mobilise knowledge, foster relationships, and implement collective action and examines how these dynamics shape the implementation of sustainable urban development projects. The thesis draws on four papers examining three Swedish cases: the urban development projects of Kvillebäcken (Gothenburg), Vallastaden (Linköping), and Brunnshög (Lund). Sweden provides a relevant context due to its long history of experimenting for sustainability in the built environment, its decentralised planning system, and its advanced implementation of energy policies, while also facing new governance challenges resulting from recent legal reforms that limit local authority. The four papers use a semi-systematic literature review, semi-structured interviews with local government representatives and developers, planning document analysis, and energy data, offering longitudinal insights into how energy policies are translated into practice. Findings indicate that fragmented responsibilities, weak accountability, and limited enforcement undermine implementation capacity, causing ambitions to weaken over time. Governance arrangements such as project-specific sustainability visions and land allocation processes provide opportunities for experimentation and initially support energy policy implementation, but their effectiveness often diminishes without follow-up. Embedding experimentation within formal governance structures, clarifying responsibilities, strengthening regulatory frameworks, and maintaining continuous monitoring are crucial for closing the gap between ambition and outcome in sustainable urban development projects.