The power station, costing $1.5 billion and recently approved for construction by the state and federal governments, has raised concerns among residents about pollution, noise, property devaluation and use of groundwater reservoirs.

According to Alister Waine, president of the Upper Lachlan Environmental Association, the noise from the facility will drive locals from their homes and similar plants, like the one at Uranquinty near Wagga Wagga in New South Wales, had driven 10 locals from their homes.

''There's [concern] with respect to water,'' Mr Waine said.

''They're actually going to be extracting their process water from our groundwater system.''

Protesters held signs saying ''What's that smell? - AGL'' and ''No gas plant in Dalton.''

An AGL spokeswoman said ''AGL significantly increased its consultation on the Dalton Power Project over the last two years and has formed a community consultative committee to address increased interest.'' AGL expects 150 construction jobs to be created, and for the project to boost the local economy and services industries.

Organisers said 100-150 people had come to support the protest throughout the morning, however, at noon a head count numbered the protest at about 25.

According to modelling on the AGL website, the plant at a 1500 megawatt operation would emit 661 kilograms an hour of nitrogen dioxide, 197 kilograms an hour of carbon monoxide and 43 kilograms an hour of sulfur dioxide.

All are recognised as potentially harmful to humans at concentrated and long-term exposure levels.