Runbooks in Azure Automation Accounts primarily use the older AzureRM PowerShell module. However, you can start using the newer Az PowerShell module.

The process is essentially:

1. Create an automation account
2. Install the Az.Accounts module
3. Create an Azure Run As Account
4. Prepare a small Runbook to test the setup

Get started by preparing a resource group and automation account:

New-AzResourceGroup -Name "demo_automation" -Location "East US"

New-AzAutomationAccount -Name "AzDemoAutomationAccount" -Location "East US" -ResourceGroupName "demo_automation"

Install the Az.Accounts module:

New-AzAutomationModule -AutomationAccountName "AzDemoAutomationAccount" -Name "Az.Accounts" -ContentLink "https://www.powershellgallery.com/api/v2/package/Az.Accounts/1.3.0" -ResourceGroupName "demo_automation"

Note: You can also install the Az.Accounts module via the Modules gallery in the automation account settings.

Now create the Runbook:

New-AzAutomationRunbook -AutomationAccountName "AzDemoAutomationAccount" -Name "AzAccountTest" -ResourceGroupName "demo_automation" -Type "PowerShell"

At this stage you can head to the Azure Portal and go to the automation account you just created. Under Account Settings -> Run as accounts, create the Azure Run As Account.

Finally, add the following code to the Runbook:

$connection = Get-AutomationConnection -Name AzureRunAsConnection

Connect-AzAccount -ServicePrincipal `
                -Tenant $connection.TenantId `
                -ApplicationID $connection.ApplicationId `
                -CertificateThumbprint $connection.CertificateThumbprint

Get-AzContext

You can now test the Runbook and should see the output of Get-AzContext.

At this point you can add further Az.* modules as required. Just be aware that you shouldn't (can't) mix Az and AzureRM calls in the same script.

See also: Az module support in Azure Automation