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This is a bit overdue and a follow up to a few other posts I have regarding using Service Principal authentication with Power BI reports Power BI using Service Principal with Synapse SQL Pool and Power BI using Service Principal with Synapse Data Explorer (Kusto) Pool.
With the other two posts I did last year I had to use the SQL Server ODBC driver to get that to work and the big downside to that is that you need to use a gateway with that. Well in this case we are going to take a look at the new Shareable Cloud Connections that were announced earlier this year Streamlining cloud connection management for datasets, paginated reports, and other artifacts | Microsoft Power BI Blog | Microsoft Power BI
In the previous articles I already shared how to create the Service Principal account, so really the only thing to show here is the new connection you can create in the Power BI (Microsoft Fabric) service. Here is a link to the documentation that will walk you through this as well Create and share cloud data sources in the Power BI service (Preview) – Power BI | Microsoft Learn.
So in the service you click on the Settings gear icon in the top right and select Manage connections and gateways. From there you will click on the +New button in the top left and then configure your Cloud connection like such and you will see under the authentication method you can choose Service Principal!
Once you upload your report that is using the similar connection all you need to do is modify the dataset (semantic model) settings and adjust the reference from the personal cloud connection to the shareable cloud connection that you created which is using the Service Principal like in the following screenshot.
Once that is done you can go back and view your report and everything is good to go!
And you can go ahead and do your refreshes just like you would normally:)
And no more ODBC driver and no more gateway!!!
Dan English's BI Blog 
