Llangattock is a small village scattered along a fold in the Brecon Beacon mountains – the softly wooded slopes, high hay meadows and streams making the area one of the loveliest parts of Britain.

“If you forget to put limits on people and assume that they are capable of fantastic things, then the impossible becomes possible,” said Michael Butterfield, who spearheads the Green Streets.

The 1,300 inhabitants in the 420 homes have, however, more than the view to be proud of. They are on track to making Llangattock Britain’s first ”carbon-negative community” by 2015. This is no new eco town, but an established settlement alongside the River Usk with a mixture of traditional hill farms and 20th-century bungalows. Yet with energy-saving and energy-creating measures, the community has shown what can be achieved when everyone pulls together.

The woodland group manages and coppices 20 acres of mostly ash and alder for the village’s wood-burning stoves; the residential group coordinates distribution of home energy-saving devices from insulation to solar panels. In just one year, 55 homes will have solar panels installed on their roofs.

The 74-member bio-diesel group collects chip fat from restaurants and has converted more than 11,000 litres of fuel, saving 29 tons of carbon dioxide; 60 families tend a field of new allotments and have resurrected the village fête; and the hydro group is forging ahead with six small-scale hydroelectric schemes on the streams around the village.

Larger projects, such as a woodchip district heating scheme and an anaerobic digester, fed with grass and slurry waste from local farms, that will earn the village an income, are also under way.

But how has a small village with a disparate and fairly elderly population pulled off such an achievement?

Almost exactly a year ago, the village won the Welsh heat of British Gas’s Green Streets competition, run to find the ”greenest” communities in Britain. The win provided £137,400 of grants from British Gas, and other grants and earnings have made a total income for the village of £575,000.

The volunteers make money, too: the litter-picking group earned £1,100 from gathering fly-tip waste, which has been spent on bulb and wild flower planting on the road verges; the woodland group hopes to be able to train and employ local youngsters in woodland management with profits from log sales.

“Most of the young leave after school and don’t come back until they are in their forties,” says Jackie Charlton, who runs the woodland group. “We want to give young people a reason to stay in the village. But already, a once sleepy community has really woken up in the past year.”

The village has formed a community interest company with a board of seven directors, which manages the budget. Michael Butterfield spearheads the Green Streets project from his home.

“If you forget to put limits on people and assume that they are capable of fantastic things, then the impossible becomes possible,” he says. “Small communities like ours have so much latent expertise – retired financiers, trainers, engineers, just waiting to be tapped. We think we have found a model that can work for many rural communities.”

Pete Bates, a retired teacher, coordinates the residential group and divided up the lion’s share of the British Gas grant between 38 households who signed up for energy-saving measures in their homes. “Twenty houses had large grants of £4,000 and another 18 had small grants of £400,” he says. “Part of our research will compare how much energy people save whether they spend large or small amounts. We have found behavioural changes – turning down the thermostat, turning off lights, unplugging the TV – play a huge part in getting consumption down.”

Andrew Fryer, who lives on a farm on the hill above the village, is also involved and says, despite the sceptics, the goal of being carbon negative in five years is ”completely realistic”. “By maximising the grant money available and not being afraid of getting venture capital involved – the larger schemes like the anaerobic digester will require large sums – we have made changes that groups who think money is something to be afraid of only dream about,” he says.

Lee Barlow, British Gas’s community project leader, says: “Llangattock is a great example of how forward-thinking people can help their community to generate and use energy more efficiently, and create a legacy for future generations. We have enjoyed watching their fantastic efforts – it highlights how much can be done if a community pulls together to make it happen.”