Can I simulate update process locally by clicking reload extension?

Is clicking reload (in chrome://extensions) same as when chrome extension get updated automatically?

I want to prevent waiting 60 minutes for chrome webstore update process.

It's not exactly the same.

Differences:

1. Update process will trigger chrome.runtime.onUpdateAvailable (and an extension has a chance to delay it), a reload will not. Same with onRestartRequired for Chrome OS Kiosk.
2. You won't be able to test chrome.runtime.requestUpdateCheck.
3. No permissions update warnings will be triggered. It's possibly the thing one wants to check for most often.

Other than that, this is similar to an extension receiving an update and not objecting to be updated. So if you aren't testing those 3 specific things, just reloading is OK.

Unfortunately, testing for updates on Chrome is now difficult since Chrome immediately blocks any packed extension that has "update_url" set to anything other than the Store, unless you can take advantage of an enterprise policy-based install.

So you don't have much choice unless the above can apply and you need to test one of the 3 features listed.