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A novel approach to power quality assessment based on real-time (RT) hardware-in-the-loop (HIL) simulation is proposed. The RT-HIL platform is being used for power quality studies of NAVY all-electric ships. The sensitivity for power quality deviations of a variable speed drive controller card was tested in the platform. The successful experiment has contributed to the conceptual design of a universal power quality test bed, which would have the function of testing the immunity of electric components and equipment and the consequent impact on ac distribution systems.