How Power BI connections work

To understand how refreshing works in Power BI, you have to have a clear understanding of the connections involved.  Let's look firstly at what happens when you create and publish report, then at the connections created and used.

How Power BI Reports Work 

In a PBIX report, you import data from databases or files (in my case, from two files - one Excel workbook, and one CSV text file):

I've deleted some columns from the data model, and renamed others.

You then extract data from this simplified data model to create a report:

Thus the report gets its data from the data model, and the data model gets its data from the underlying data source (in this case an Excel workbook and a CSV file, but this could equally well be a SQL Server or other database).

When you publish this report, you get two things in Power BI Service - a report and its associated dataset:

I've got a report and a dataset, both called Simple report.

Here's a diagram of what's involved (Power BI Desktop is on the left, Power BI Service on the right):

Note that in Power BI Service you can't actually see the relationships as shown above.

So far, so good - now let's have a look at what connections are involved in this diagram.

The connections used for Power BI reports, and how refreshing works

So what it comes down to is this.  In the Power BI Desktop report (the left side), you have a connection:

This connection knows which files to look for, and where, and also contains any security settings needed.

A typical connection specifies four things (the settings for our two files are shown as examples):

And finally, we get to the problem.  Here's what the published report has to do to refresh:

The published report is irrelevant. It's the dataset which has to refresh, by somehow using a published version of the connection created in the desktop file to link to the underlying data files or databases.