By David Such, VP Pacific, AVEVA
When the Australian Energy Market Operator released its Draft 2026 Integrated System Plan in December, it confirmed what many operators already suspected: Australia’s energy system is changing faster than the infrastructure to support it.
Renewables reached 51% of the National Electricity Market in the fourth quarter of 2025, yet AEMO warned that slower delivery of transmission and storage would erode benefits to consumers and present risks to reliability.
The IEA’s updated Net Zero Emissions by 2050 Scenario reinforces a similar point globally. Around 65% of the emissions reductions required by mid-century are achievable with technologies already available. The challenge facing Australian energy operators is how to balance reliability, affordability and sustainability simultaneously, at speed, under pressure, and within existing asset portfolios.
Related article: Roadmap for grid stability in Australia’s shift to renewables
Digital tools, from cloud data platforms to AI-driven analytics, are central to that challenge. Schneider Electric, whose industrial software customers span oil and gas, power generation and mining, reports that operator spending on digital optimisation tools grew faster in 2025 than in any prior year. 2026 looks like the year operators stop treating digital transformation as an innovation project and start deploying it as their primary decarbonisation lever.
Australian energy companies are under mounting pressure to extract more from what they already operate. The CSIRO and AEMO’s draft GenCost 2025–26 report found that battery costs continue to fall by double digits while capital costs for gas, coal and nuclear are climbing.
Thus, operators who can wring efficiency from ageing infrastructure will avoid the cost penalties of delayed new builds.
Digital twins and real-time optimisation platforms are the mechanism to enable this balance. An operator running a 30-year-old gas processing facility can overlay live sensor data onto a digital replica of the plant, spot where heat exchangers are underperforming, and schedule maintenance before output drops. Task-specific AI agents take this further, automating anomaly detection and predictive maintenance in the remote and hazardous environments common across Australian operations.
After years of tentative trials, AI is crossing into enterprise deployment across the energy sector. Where it is landing hardest is in decarbonisation, because the operational decisions that drive emissions reductions (when to run which asset, at what load, with what fuel mix) are exactly the kind of problems AI handles well.
Generative design tools are already compressing development timelines for renewable installations and LNG infrastructure. For Australia, the world’s largest LNG exporter with over $50 billion in new projects under development, faster engineering cycles translate directly into earlier revenue and lower capital costs. Operators who embed AI-driven workflows now will shape how the country’s energy systems are designed and operated through to 2035.
As digital tools surface operational inefficiencies in real time, boards and investors are raising the bar. Capital will increasingly flow to operators that can prove they are cutting emissions and costs simultaneously, rather than trading one off against the other.
Locally, this pressure is compounded by the government’s legislated emissions reduction targets of 43% by 2030 and net zero by 2050, with a 2035 target of 62–70% below 2005 levels now confirmed. Credibility in 2026 will be earned through verifiable, data-backed operational performance, not pledges.
As upstream, midstream and downstream operations become digitally linked, the energy value chain starts behaving as a single connected system rather than a collection of silos. When an operator and its suppliers share real-time production data, inefficiencies that once sat hidden between handoffs become visible and fixable.
Related article: Australia’s energy outlook revealed in 2026 trends report
This is a pragmatic shift, driven by commercial reality. Energy companies must satisfy shareholders while meeting environmental obligations, and they can only do that within their existing operational flows. Gas, solar and storage all need to be managed as parts of the same optimised whole.
Australian energy operators have spent decades managing LNG supply chains, remote mining infrastructure and volatile commodity markets. As the country navigates what AEMO describes as a rapid transition away from coal generation, that hard-won operational knowledge matters more than ever. The operators who pair it with real-time digital intelligence will be the ones who deliver on the energy trilemma without having to choose between reliability, affordability and sustainability.
