This error is another in a series of common errors that users can hit during seemingly normal scenarios that might be a little bit difficult to interpret at first. We actually did work to try and make the error descriptive, but to the new user, it may still be cryptic. This error occurs when you chose the “Manage PowerPivot Data Refresh” option of an xlsx file which does not contain any embedded PowerPivot data.
The “Manage PowerPivot Data Refresh” context menu option is associated with all files of type xls(x|b|m). There is no way to filter this out at any lower level of granularity via the SharePoint hooks for adding context menu options. Manage PowerPivot Data Refresh is only supported on workbooks which have an embedded Analysis Services database inside them which means that the user had to have installed PowerPivot for Excel on a client machine and modeled a database as part of this workbook. The refresh in question is about refreshing the embedded Analysis Services database with data retrieved from the backend sources (defined when the database was originally modeled) and resaving the updated workbook. It should not be confused with Excel / Excel Services options to refresh the data connections in the workbook. That option is about refreshing data stored in Excel’s caches. With regards to PowerPivot, that would be refreshing from the embedded database, not the backend data from which the database was sourced. In summary, this feature will not work against a workbook which does not have an embedded database because there is no database to refresh. This is by design and should not be interpreted as indicating that there is something wrong with your system.
Hopefully that will give some clarity as I expect a number of people will hit this when playing around and some subset might be a bit confused. Thanks