The demonstration outside Trewern School was to have highlighted a proposed energy project on the outskirts of the village near Welshpool.
The Buttington Incinerator Impact Group had hoped to protest on Friday to object to an application for a waste incinerator which would produce energy on the site.
Covid rules in Wales forbid a gathering of more than 30 people and Dyfed Powys officers were concerned about social distancing. The force has asked organisers not to stage the event.
Ian Thompson for the impact group said a similarly protest held last October was well attended and a event had been planned for Friday.
"Social distancing concerns relayed by the police have put a stop to it," he said.
The applicant, Broad Energy, says the development at Buttington Quarry would bring jobs and provide energy, but campaigners say air quality and increased lorries bringing in rubbish to be burned are among their concerns.
While maintaining a visual presence with banners along the A458 passing through Buttington and Trewern, campaigners are now urging members of the public to engage in the public consultation online.
Mr Thompson said: “We have been opposed to this development from the outset on the grounds that it is quite simply the wrong thing in the wrong place at the wrong time.
“We are particularly frustrated that this planning application has been allowed to proceed at a time when Covid restrictions make it impossible to arrange public meetings or gatherings to discuss or object to the proposal.”
“At a very basic level, our democratic rights are being undermined. A request for an extension of the consultation period seems to be falling on deaf ears at Welsh national government level.”
Because the proposed incinerator has an intended capacity in excess of 10MW, it qualifies as a “Development of National Significance” so the decision falls to the Welsh Government, instead of Powys planners.
More details of the protesters' campaign can be found on stopbuttingtonincinerator.com