Commission Implementing Regulation (EU) No 1348/2014 requires contracts for the supply of electricity or natural gas to a single consumption unit with a technical capability to consume 600GWh/year or more to be reported to the Agency (Article 3(1)(a)(vii)). How can final customers assess “technical capability to consume”?

Answer: The Agency understands “technical capability to consume” to mean the maximum amount of energy that a final customer could consume in a year, i.e. if the customer were to run its facility fully at all times throughout the year.

The consumption relates to gas or electricity. The consumption of gas and electricity should be assessed separately to estimate whether it reaches the 600GWh/year when the facility is running fully at all times. This is because Article 2(5) of REMIT itself refers to the consumption of a final customer of ‘either electricity or natural gas’, meaning one or the other.

In assessing ‘technical capability to consume’, the Agency is of the view that final customers should take into account the amount of energy that the single consumption unit consumes or has capacity to consume.

If a single consumption unit consumes 600GWh/year or more of either gas or electricity, then it is clear that their “technical capability to consume” is also greater than 600GWh/year and therefore all contracts for the supply of either gas or electricity (the commodity which is ≥ 600GWh/year) to this single consumption unit are reportable. If a single consumption unit typically has an annual consumption of below 600GWh/year, final customers should make an assessment of the unit’s technical capacity to consume. To do this, consideration should be given to the consumption capability of the unit in the first instance i.e. the amount of energy that would be consumed if the single consumption unit was to run at its maximum output over a year.

If on this basis the single consumption unit has a consumption capability of over 600GWh/year, final customers may also consider the import capacity of the unit i.e. the maximum amount of energy (either electricity or gas) that can flow from the network into the unit. If this import capacity constrains the unit’s technical capacity to a level below 600GWh/year, it is the Agency’s view that the unit would not meet the 600GWh threshold.

Final customers should also be aware that if there is any change to the technical capability to consume of a single consumption unit, they should re-evaluate whether this unit meets the 600GWh threshold.

The Agency suggests caution around the use of historical consumption to estimate technical capability to consume as this does not relate to the actual capability of the unit and circumstances can change which might result in additional consumption. However, the Agency understands that there may be limited circumstances where this could be a reasonable approach.