Significant amounts of biomass residues were generated in Indonesia. While untreated, residues emit greenhouse gases during the decomposition process. On the other hand, if efficiently utilized, these residues could be used to produce value-added products. This study investigates opportunities for harnessing the full potential of palm oil residues (i.e., empty fruit bunches, kernel shells, fiber, and mill effluent). As far as we are aware, the study is the first attempt to model the palm oil supply chain in a geographically explicit way while considering regional infrastructures in Sumatra Island, Indonesia. The BeWhere model, a mixed integer linear programming model for energy system optimization, was used to assess the costs and benefits of optimizing the regional palm oil supply chain. Different scenarios were investigated, considering current policies and new practices leading to improved yields in small-scale plantations and power grid connectivity. The study shows that a more efficient palm oil supply chain can pave the way for the country to meet up to 50% of its national bioenergy targets by 2025, and emission reductions of up to 40 MtCO₂eq/year. As much as 50% of the electricity demand in Sumatra could be met if residues are efficiently used and grid connections are available. We recommend that system improvements be done in stages. In the short to medium term, improving the smallholder plantation yield is the most optimal way to maximize regional economic gains from the palm oil industry. In the medium to long term, improving electricity grid connection to palm oil mills could bring higher economic value as excess electricity is commercialized.

Hydropower plays an important role as renewable and clean energy in the world's overall energy supply. Electricity generation from hydropower represented approximately 16.6% of the world's total electricity and 70% of all renewable electricity in 2015. Determining the different effects of 1.5 and 2 °C of global warming has become a hot spot in water resources research. However, there are still few studies on the impacts of different global warming levels on gross hydropower potential. This study used a coupled hydrological and techno‐economic model framework to assess hydropower production under global warming levels of 1.5 and 2 °C, while also considering gross hydropower potential, power consumption, and economic factors. The results show that both global warming levels will have a positive impact on the hydropower production of a tropical island (Sumatra) relative to the historical period; however, the ratio of hydropower production versus power demand provided by 1.5 °C of global warming is 40% higher than that provided by 2 °C of global warming under RCP6.0. The power generation by hydropower plants shows incongruous changing trends with hydropower potential under the same global warming levels. This inconformity occurs because the optimal sites for hydropower plants were chosen by considering not only hydropower potential but also economic factors. In addition, the reduction in CO₂ emissions under global warming of 1.5 °C (39.06 × 10⁶ t) is greater than that under global warming of 2 °C (10.20 × 10⁶ t), which reveals that global warming decreases the benefits necessary to relieve global warming levels. However, the hydropower generation and the reduction in CO₂ emissions will be far less than the energy demand when protected areas are excluded as potential sites for hydropower plants, with a sharp decrease of 40–80%. Thus, government policy‐makers should consider the trade‐off between hydropower generation and forest coverage area in nationally determined contributions.