STATE-OWNED energy company Bord na Móna plans to invest €1.4 billion in expanding and moving the group away from its traditional activities over the next five years.

The company will stop exploiting peat bogs, the purpose for which it was founded in 1946, over the next two decades, and refocus its business on a mix of energy, waste-management and recovery, and horticulture.

Recently-appointed chief executive Gabriel D'Arcy said yesterday that Bord na Móna would spend €1.2 billion on building up its energy business over the next five years.

This will include close to €500 million on developing a wind farm at Oweninny in northwest Mayo.

The company has been operating a wind farm there - the first such commercial facility in the Republic - for the last 15 years.

This produces six megawatts (MW) of electricity every hour at full capacity. The planned expansion will see Bord na Móna add 350MW to that.

This means that when it is completed the wind farm will have the potential to produce enough power to supply 350,000 homes at full capacity.

Oweninny has enough wind to ensure that it can produce power close to 35 per cent of the time.

As wind farms cannot produce power around the clock, Bord na Móna plans to back them up with flexible, gas-fired facilities known as "peaking plants", which can be turned on and brought up and wound down again quickly.

Mr D'Arcy said Bord na Móna was going to seek a partner to develop its renewable energy business.

Alongside this, the company is planning to spend €150 million on expanding its waste-management and resource-recovery businesses, and a further €50 million on innovation and research and development.

The group's horticultural business supplies peat moss fertilisers to markets in Ireland and Britain, where its biggest customer is DIY chain B&Q.

The British government wants manufacturers of these products to reduce the amount of peat in their fertilisers.

Bord na Móna has successfully developed a system of converting organic waste from gardens and parks into fertiliser, which reduces the need for peat moss.

Through its subsidiary Advanced Environmental Systems (AES), it is planning to introduce a combined mechanical and biological treatment process developed by bioenergy firm Bedminster.

The system is already in use in the US, and last year Cheshire's regional authority in England gave planning permission to Dublin-based Bedminster to build a waste-treatment facility in Northwich.

As Bord na Móna has already pledged not to open and drain any more of its boglands, this resource will run out by 2025. Thus the company has to shift its operations into new areas.

Mr D'Arcy said yesterday the group has a strong "bundle of unique capabilities" in energy, waste and resource-recovery, and is seeking to knit these together to redevelop the business.

Yesterday Bord na Móna said that profits for the 12 months ended March 26th, its financial year, were €16.8 million.

This was down 30 per cent on the €24.8 million it reported in 2007.

However, a €4.1 million once-off gain from the sale of land boosted last year's figures, while reorganisation and redundancy charges for 2008 were €3.8 million compared with €1.2 million in 2007.

The group paid a dividend of €8 million to the State this year, over twice the €3.9 million it paid in 2007.

Combined group sales were €371.2 million this year. This was close to 25 per cent ahead of 2007 turnover, which was €299.2 million.

Acquisitions, including AES, boosted 2008 turnover by €41.9 million. The comparable figure for last year was €8.9 million.