The provisions of this Directive governing concessions awarded by contracting entities shall apply to the following activities:

1. As far as gas and heat are concerned:

(a) the provision or operation of fixed networks intended to provide a service to the public in connection with the production, transport or distribution of gas or heat;

(b) the supply of gas or heat to such fixed networks.

The supply by a contracting entity referred to in points (b) and (c) of Article 7(1) of gas or heat to fixed networks which provide a service to the public shall not be considered to be a relevant activity within the meaning of the first subparagraph of this paragraph where all of the following conditions are met:

(i) the production of gas or heat by that contracting entity is the unavoidable consequence of carrying out an activity other than those referred to in this paragraph or in paragraphs 2 and 3 of this Annex;

(ii) the supply to the public network is aimed only at the economic exploitation of such production and amounts to not more than 20 % of that contracting entity's turnover on the basis of the average for the preceding three years, including the current year.