The general amazement at the power failures that plunged New York and much of the US's north-eastern seaboard into darkness five years ago was perhaps best summed up by Bill Richardson, former energy secretary. He quipped that the US was "a superpower with a third world grid".

Yet the US is far from the only developed country with a shaky power structure. In fact, Europeans have also suffered blackouts as a result of their ageing electricity infrastructure. In 2006, a power failure in Cologne spread through France, Italy, Spain and Austria, with Belgium, the Netherlands and Croatia also feeling the repercussions.

The cuts were short-lived compared with the 18-hour blackouts Italy suffered in 2003, but they prompted Romano Prodi, the country's then prime minister, to call for a European central power authority. Even today, Europe is still far from having a co-ordinated energy policy.

The International Energy Agency (IEA) estimates that the world must invest $22,000bn (€16,700bn, £13,000bn) in energy, half of that in the power sector. More than $8,000bn will have to be spent by developed nations, with the power sector again eating up half of that budget. Much of the money is needed to renovate and replace existing systems, which were built in the 1960s and 1970s.

The industry has become an attractive place to invest private equity and other fund money, fuelled by the easy credit years that have now so abruptly come to an end. A Deloitte study concluded that specialist infrastructure funds had grown from fewer than 10 in January 2003 to 40 by July 2007. The value of their deals grew from less than $1bn in 2003 to more than $22bn in 2006.

Russia's Gazprom has also been keen to expand westward and invest "downstream" in Europe, prompting European politicians to ring the alarm bells about energy security and providing ammunition to those who argue that Europe needs energy champions to defend such advances.

Some European governments have been pushing for investment in expensive gambles such as the Austrian-led Nabucco gas pipeline, which would bring gas from the Caspian Sea and serve as an alternative to Russian supplies. Others, including Germany and Italy, have undercut such efforts by negotiating bilateral investments in pipelines that will bring Russian gas to them directly.

Money is also being spent to make Europe and US energy systems match the environmental ambitions of the countries' policymakers.

The European Union has set a target of getting 20 per cent of its energy from renewable sources by 2020 - a goal that is already proving difficult to reach, in part because the needed infrastructure, such as wind turbines and solar panels, are expensive and are seen by many as eyesores.

Meanwhile, a handful of carbon capture and storage pilot programmes across the world hope to eventually lead to the technology becoming economically viable enough to help make a serious dent in the levels of environmentally harmful carbon being emitted into the atmosphere.

But one of the bigger gradual infrastructure transformations in Europe has come in the oil industry, which has reconfigured its refineries to meet the booming demand for diesel created by European incentive schemes. In fact, Europe's relatively new-found love affair with the diesel car - about 30 per cent more efficient than its petrol-consuming counterpart - has been so intense that the US is exporting increasing amounts of diesel to Europe while European refiners are shipping petrol to the US, which still uses diesel almost exclusively for industrial and agricultural pursuits.

Prices have reflected the demand for more diesel. Wholesale diesel prices have doubled, while wholesale gasoline prices are up by a more modest 40 per cent.

That could be aggravated if the US jumps on the diesel-run bandwagon. At this year's Detroit auto show, Audi, Dodge and Mitsubishi unveiled not only their usual new stable of high-performance sports cars, big trucks and coupés, but also a new line of diesel versions in an effort to find a way to meet the fuel-efficiency standards the US passed in December. It may take years to warm the US public to diesel but the car companies' new diesel lines illustrate just how profound an influence policy decisions have on choices made by refiners, car companies, energy groups and, most critically, consumers.

While the US is only in the very early stages of exploring the idea of diesel, Washington and state policymakers have long dictated trends in refining, pipeline and storage infrastructure by their ever-increasing requirements for petrol to be as clean as it can be. The recent phasing out of MTBE, an additive that some believe causes cancer, and the introduction of ethanol incentives, have prompted the need for new processing facilities, pipelines and storage tanks.

On a grander scale, Washington has fired the starting gun in a race to build a new set of nuclear power plants, with the fastest taking home the tax benefits.

In Canada, technology and infrastructure breakthroughs are helping companies such as Royal Dutch Shell and ExxonMobil extract tar from sand in huge mining operations that eventually produce oil that can be refined. But the massive extra heavy oil developments require large amounts of water and energy and have been criticised by pressure groups such as Greenpeace for being environmental disasters.

Total, the French oil company, and its peers say they are committed to lessening their impact on the environment, but critics worry that the recent drop in oil prices and the credit crisis mean there will be less money to spend on "green" pursuits.

Here, too, the future of energy infrastructure will be decided by lawmakers. Critical for many alterative energy developments, is their willingness - despite their huge expenditures bailing out banks - to subsidise projects whose economics have deteriorated with the deepening of the credit crisis and the fall in oil prices.

But with profound change often comes paralysis. The credit crisis has turned politicians and US presidential candidates' attentions away from energy policy, while the falling oil and natural gas price have put in doubt the economics of projects as varied as wind farms in the UK and the development of Canada's tar sands.

In spite of the warnings of the IEA and memories of European and US cities plunged into darkness, the developed world will almost certainly remain littered with examples of "third world" energy infrastructure for longer than is prudent.