Scarcity, high price and environmental footprints of water and energy resources are well-recognized and wicked issues in irrigated agriculture. Water and energy are principal inputs for agricultural production systems. Efficient use of these resources is vital for the productivity and economic competitiveness of agriculture as well as for environmental sustainability. Modern irrigation application systems are on the one hand highly water efficient, but on the other they require a high energy input. This paper explores the water–energy nexus of irrigation modernization by presenting a case study from a large irrigation area in the Murray-Darling Basin. A dynamic node–link model was developed to model various combinations of irrigation supply systems and irrigation application technologies. Comparison of modelled water savings and additional energy consumed to realize those savings indicates that more water savings (2.98 ML ha−1) can be achieved by conversion to drip irrigation at the expense of an additional 146 kWh ha−1 as compared to furrow irrigation. For a sprinkler system 1.19 ML ha−1 can be saved by expending an additional 353 kWh ha−1. These water savings result in additional GHG emissions of up to 1027 kgCO2-e ha−1. The water and energy use indicators show that pressurized irrigation systems are in fact more efficient and more productive than traditional irrigation approaches.