Currently there is no way to change this 256MB in Power BI Desktop or Excel although someone has already posted a suggestion on the Ideas site to allow us to change it. How much of an impact does this actually have on refresh performance though? Without the ability to change this setting it’s hard to say, but I suspect it could be significant and that a lot of Power Query performance problems could be explained by this behaviour.
The situation is different in the Power BI service, where I understand there is a limit on the overall amount of memory that a single Power Query query evaluation can use.
Read on to understand the differences here between running on Power BI Desktop and running in the Power BI service, as well as a bit of testing on Chris’s part.