When bushfires converged on the small town of Nerrigundah on the far south coast of New South Wales, claiming the life of a 71-year-old man and destroying 20 of its 25 homes, its remaining residents huddled in the fire station shed.

Key points: A man was killed and 80 per cent of Nerrigundah's homes were destroyed in a ferocious bushfire on New Year's Eve

A man was killed and 80 per cent of Nerrigundah's homes were destroyed in a ferocious bushfire on New Year's Eve The local RFS captain says he and 11 other residents wouldn't have survived if the fire station shed wasn't fitted with sprinklers

The local RFS captain says he and 11 other residents wouldn't have survived if the fire station shed wasn't fitted with sprinklers Despite their terrifying ordeal, many residents have decided they will stay and rebuild in their historic town

Nerrigundah fire captain, Ron Threlfall, said in all his years of firefighting he had never seen anything like what occurred on New Year's Eve.

"There was a roaring, deafening sound with a red glow," he said.

"All of a sudden everything just exploded in front of us."

The town's 12 remaining residents huddled in the fire shed as the firestorm approached.

"This door pushed in and the crew had to push up against it to stop the door caving in," he said.

"We had sparks flying in here and smoke everywhere.

"I had my three kids in there. It was terrifying."

Ron and Deborah Threlfall believe they would have died if it not for the fire shed's sprinkler. ( ABC South East NSW: Claire Wheaton )

Sprinkler system saved lives

Mr Threlfall believed they would have died if it were not for the shed's generator-powered sprinkler system.

"If we were out in it there wouldn't have been anything left of us," he said.

He now wants to see similar sprinkler systems installed on every fire station shed in the country.

"They should be mandatory and they should be remote controlled," Mr Threlfall said.

The historic town is now a shell of its former self — the trees are charred, homes are rubble, and the earth is black.

Mr Threlfall's stone artworks, showing people in shock and sadness, survived the fire and have now taken on new meaning.

What is left of Nerrigundah has been without power for 13 days, and Mr Threlfall's wife, Deborah Threlfall, said while they had been humbled by food and clothing donations, they desperately needed more water and fuel for the generator.

"It is difficult having a shower with just a trickle of water and washing your hands in a bucket," she said.

Stone statues created by the local RFS captain now have new meaning. ( ABC South East NSW: Claire Wheaton )

Residents will rebuild

Juha Turtiainen and his partner Sylvia stayed to defend their home but were forced to flee to a nearby creek where they sheltered for three hours until the fire passed.

The couple lost their home, dogs and horses in the blaze, and Mr Turtiainen suffered burns to his legs.

"In a short amount of time this massive roar came and engulfed basically the house and the sheds," he said.

Juha Turtiainen's house burnt down in the Nerrigundah fire on New Year's Eve. ( ABC South East NSW: Claire Wheaton )

Despite the hardship, Mr Turtiainen was unwavering in his positivity and said the couple would rebuild their life in Nerrigundah.

"We're going to get a big skip [bin] in to clean up the area and start rebuilding," he said.

"We'll start to plan how we're going to build and where we're going to build."

Mr Turtiainen described the community as being quite close, despite people's differences.

"I think it gets closer after something like this," he said.

"I hope the majority will stay, but I think there will be more clearing around buildings and more fire protection."

Mr Turtiainen suffered serious burns in the fire. He may need a skin graft. ( ABC South East NSW: Claire Wheaton )

Mr and Mrs Threlfall said the community will recover from the devastation.

"Most community members have already decided they're coming back," Mr Threlfall said.

"They'll need assistance for the long-term and it won't be the same for a while — but at least the pillars of the community will return."

Mrs Threlfall said the return of some wildlife to the area had buoyed the remaining residents.

"We've seen a few wallabies, and a parrot was on the veranda the other day," she said.

"Little things like that make you feel happy.