65532 :Query Result Set too Large. (50,546)Result of 'SQL Fetch' is over the maximum result size spe

I have an app engine that runs on process scheduler and calls a query to create report in excel format. When I run it, I get above error. I have already set no limit "Max Fetch Size" parameter under PSAPPSRV section. We don't have PSQRYSRV setup. When I schedule that query on process scheduler, I still get same error.

1. Is there a setting in process scheduler that controls max row fetch for queries?

2. When App Engine is run on process scheduler, is query running on process scheduler or app server?

3. I have a feeling that issue is number of rows that Excel can handle and not the max fetch size. Is it possible? Reason I think this is, when I modify app engine to create output in CSV/Text format, I don't get this error and all rows are written in CSV