Energy Risk Professional (ERP) Exam Blog – The #1 Free Online Study Resource For The Energy Risk Professional Exam

June 10, 2013June 10, 2013

How to Prepare Better if You Have to Retake the ERP Exam

It can happen to the best of ERP candidates: You received your results and the passing score for the ERP was missed by a hair. This is of course annoying, but please don’t despair. Luckily, you have a second chance to pass and brush up on the study material again to remember it even better for the future. After venting your initial frustration, make sure to get up on your feet again as quickly as possible and get into gear to prepare for retaking the exam. How should you approach this endeavour in the best way? This article highlights the three most important ideas and tips that I email to ERP candidates when they ask me this question.

Focus more on your weak topics, but don’t forget about the topics that you passed. Look at your test scores and find the weaknesses in your exam preparation. Did you start too late? Did you underestimate certain topics? Did you approach certain topics in the wrong way (for example, focusing on qualitative problems, when the exam asked mainly quantitative problems)? But don’t get lost in this, you should know your way around the entire syllabus. I think it’s still much better to know the most salient pooints about each topic on the surface than being completely ignorant about some of the topics. it’s a question of finding the right balance, and making sure this matches with the time you have available for exam preparation.
Focus only on the original ERP syllabus and prepare your own summaries. If you have not already done so, invest in the original ERP syllabus from GARP. There is really no way around this. It used to be possible to get the individual readings individual, but that time has gone. GARP has done a wonderful job at compiling a comprehensive body of knowledge that will cover broad areas of energy risk management. When you work through the syllabus, make it a habit to take notes and thereby make your own summaries of the learning material. It’s not a good idea to rely on third-party summaries alone or on those of previous exam candidates. This can be a helpful complement, but it should not be a substitute for making your own summaries.
Solve as many practice questions and test exams as possible. Even though there are relatively few practice exams for the ERP available, you should make it a goal to get as much real-life exam experience as possible. The GARP sample questions are not good examples of the questions you will encounter in the real exam, so don’t rely on those alone. There are some practice exams from third-party providers available now, one of them being my own. I compiled these questions with the real exam in mind, and while they can’t be a prediction of what will be asked in the exam, they certainly paint a realistic picture of the timing necessary to get through all the questions and the level of complexity of the questions. Feel free to check it out if you have not already done so: ERP Practice Exam.

These are the main points that will prepare you optimally for the ERP exam in case you take it the first time or the second time around. If you take this advice seriously I am absolutely certain that you will improve your exam score dramatically, and with that your chance of passing the ERP exam. Please let me know how it goes with your ERP exam preparation, I always look forward to hearing from you. I wish you all the best in your exam preparation.

May 4, 2012May 4, 2012

The 3 Things I Wish I Had Done Differently When Preparing for the Energy Risk Professional Exam

Energy-Risk-Professional-lessons-learned

When I took the ERP exam, I was overwhelmed with the preparation like almost all candidates. The sheer amount of reading material (and the lack of preparation material) next to a demanding work schedule seemed almost too much at times, to the point where I was wondering whether enrolling for the ERP had really been such a brilliant idea.

I was lucky enough to pass the exam at the first try, but getting there was stressful, to say the least. In my preparation period, all of my free time was spent reading and learning, with little left for my family and friends. A few times I was tempted to postpone the exam to the next year, but I somehow managed to stay motivated and pushed through. I am very happy I did, but there are a few lessons from my experience that I learned during this time that could probably help future Energy Risk Professionals to design their exam preparation successfully. Even though I think I approached the ERP quite well, there are a few things that I would change to increase my learning effectiveness. Here they are:

Start earlier. I reserved about six months practice time for the ERP. As it turned out this is really the minimum, and I should have allocated at least eight (or even ten) months, including solving practice questions. So if you decide to attempt the ERP, start immediately with your preparation, no matter how early that seems. You can do it in six months (perhaps even less if you have a lot of free time), but for working professionals, ten months would be somewhat comfortable.
Read faster. When I started reading the GARP material, I took much too long to read the original material. In later levels I figured out speed reading and SQ3R, so this helped me tremendously to get through the reading material faster. While I read the ERP study material, I simultaneously took notes in question-answer format (which I turned into my ERP study notes), so this slowed down my process even more but was really a lifesaver in the review phase. Faster reading techniques will help you to have more time available for solving practice problems and to review the syllabus, so I think familiarizing yourself with cursory reading techniques can help you quite a bit in your ERP exam preparation, but also in all your other reading tasks.
Solve as many questions and practice exams as possible. When I took the exam, there were only about 60 practice questions or so out there, which is really not enough to seriously practice for any exam. I also used my ViveraRISK study notes to review, but had I not had those, the exam would have been much more difficult. I know there is still a real scarcity of practice material for the ERP, but make sure you get at least all the available free practice exams from GARP. I also created a realistic ERP Practice Exam, which I think gives you a good impression of what to expect at the exam. Solving practice questions is excellent practice and repetition at the same time. It will also give you an honest assessment of your preparedness for the exam. Make use of all the resources you have to prepared in the best way possible!

These are the main lessons that I learned, and the things I would do differently if I took the ERP all over again. At the moment, I am studying for another finance designation, and I am using these techniques to speed up the process and learn faster. You can do the same to get through your ERP exam preparation faster and more effectively!

April 5, 2012

Should You Get The ERP (Energy Risk Professional)?

Should You Get The Energy Risk Professional (ERP)?

This question comes up at least once a week: “Hi Alex, I am a [research economist/trader/risk manager/…] at [energy/power company] and wonder if the ERP is right for me for a career boost. I am currently also studying for an MBA at […]. What you would advise?”

It’s an important question, one that I also asked myself before I studied for the ERP. Here some pointers that may help you in your decision based on my own experience and discussions with other Energy Risk Professionals.

ERP vs. Bachelor’s

For starters, an important thing to understand is that the ERP is not a degree but a professional qualification. So unless you already possess a degree level education, you could not compare the ERP with a university degree or an MBA. Most corporate jobs nowadays necessitate a bachelor’s (BSc or BA) or a master’s (MSc or MA) degree in some form or another, so if you want to climb up the corporate level fast, you first will need at least a bachelor’s degree. This is also a prerequisite to register for the ERP but can be gotten around by means of at least four years of professional work experience.

If you already have a bachelor’s degree or are studying for one and you are working in the energy sector, I recommend you absolutely go for the ERP next to your work/studies. If you don’t have a bachelor’s but enough work experience, the ERP will still help you in your job, and a big plus is that you can do it next to your work at your own pace. It’s really more a matter of priorities, but in general, anyone working in the energy sector could profit from the Energy Risk Professional designation.

ERP vs. Energy MBA

Many business schools offer an MBA in international energy or something similar. An MBA in general is definitely more involved (and much more expensive) than the ERP, and again, the MBA is a degree, while the ERP is “only” a professional designation. An important distinction is that the ERP is geared towards risk management alone, while the MBA also includes management and an array of organizational skills such as marketing and sales.

The applications for an ERP are different from an MBA: The MBA candidate would want to work in an executive position as a director or CEO, while the ERP is geared towards risk management, and not leadership or team management. So if you know you want to work in risk management specifically, the ERP would be preferred, otherwise the MBA will give you a broader education for future career enhancement. If you can do both, that would be ideal in my opinion, but carefully weigh the cost and the benefits with what you really want to do (risk management vs. general management) first.

ERP vs. FRM/CFA/CAIA

GARP offers also the FRM (Financial Risk Manager), which often goes in line with the CFA (Chartered Financial Analyst) and the CAIA (Chartered Alternative Investment Analyst). CFA or CAIA charterholders often also have an FRM. The Energy Risk Professional is the newest of all these professional designations and the only one that really involves energy. Commodities are also part of the CFA and the CAIA curriculum, but only at the margin, while the ERP covers extensively options and financial instruments used for risk management in the energy and financial sector.

In my opinion, these designations are complimentary. So you should not sacrifice one for the other if you have already enrolled. For example, if you’re currently studying for CFA Level 2 but are interested in the ERP also, don’t give up on the CFA but try to do both! There are not many charterholders yet who have the ERP next to the CFA and/or the CAIA, so this may give you an edge. Just do a search on Linkedin for “CFA ERP”, you will be surprised!

Conclusion

As you can see, I would advise almost anyone working or interested in energy to go for the ERP. Why? Mostly, because while it is still relatively new the designation will definitely grow in acceptance and importance in the years to come. I wrote a separate blog post about Energy Risk Professional job prospects, feel free to check it out.

In a nutshell, getting a secondary or tertiary education is always an asset both for yourself and for your employer. If you’re constantly improving your skills you will be bound to send a positive signal to your employer when the time of promotions comes up, and you will possess important and necessary skills that have the potential to give you a career boost.

March 19, 2012March 19, 2012

Nuclear Energy: Does The World Need It?

Nuclear energy risk management is only a small part of the Energy Risk Professional (ERP) curriculum, but I believe this area of expertise will gain in importance over the next decade. A conversation starter is this TED Debate about the usefulness of nuclear energy: Pros and cons are presented as an overview, and renewable energy is also briefly touched upon. Watch it critically and assess the arguments as a repetition of your study about nuclear energy.

Summary points “Pro nuclear”:

The waste generated by a nuclear plant for a lifetime of electricity for one person goes into one Coke can.
Many countries are already maxed out on wind, solar and water energy.
Nuclear energy is used as a disarmament tool for warheads in Russia and the US.
There are not enough renewable energy sources to provide enough electricity.

Summary points “Anti nuclear”:

CO2 emissions from nuclear are much larger than admitted by the industry, especially when compared to renewables.
Nuclear energy is a reason for nuclear weapons proliferation in developing economies.
Footprint of wind energy on the ground is the smallest, while nuclear is the largest (including safety perimeter).
There is plenty of renewable energy available today to replace nuclear power plants.

January 18, 2012January 18, 2012

My ERP Exam Experiences

Note from Alex: This is a guest post from Shafic Suleman. Shafic took the ERP exam in Edinburgh and passed in November 2011. He writes about his experiences and preparations for the ERP exam. Enjoy!

My desire to learn more about energy started when I was a kid, I have always wanted to learn, and solve problems relating to electricity, gasoline, diesel and alternative energy, I developed the interest and starting selling kerosene to my community locals for use as fuel at homes, which made me a very rich kid in my community those days.

However my dream came through when I was introduced to GARP’s Energy Risk Professional in 2010, after taking a critical look at the bulk of course guild lines I realised that this is it, my future, my career and my dream to get into the energy industry. Slowly I scan through the ERP study guide night over night and the more I scan through the guide the higher my desire and interest in ERP. The Energy Risk Professional course contains everything you would need to know about the energy industry and risk management.

In November 2010 I decided to attempt the ERP exam, after several days and nights of preparation. On 20 November 2010 a Saturday, it was due to write the exams. Sincerely, in my heart I felt that I still needed a whole year more to study. With hope and conviction of passing the ERP exams, I travelled all the way from Ghana to Nigeria which by then is the only closest GARP exam centre to write the ERP exams. I reported at the exams centre an hour before time to start the morning session since Nigeria is a bit different from Ghana even though both countries are in West Africa.

After 30 minutes of checking in and clarification of exam tickets and National Identification cards I found myself in the exam room and a proctor reading the exams instructions to us, the correct calculators to use for the exams that is HP or Taxes Instrument calculators which are the only permitted calculators. I was finally told to start work at exactly 8:30 am and the morning session would last for 4 hours.

The exams was getting interesting in the morning but slowly after 2 hours I got so tired, since I was used to writing exams which only lasted for a maximum of 3 hours, the ERP exam first session lasted for 4 hours, I was exhausted after the morning session, but the afternoon session was worse because by then I was completely exhausted. After the exam, I realised that I would not pass. Because the exam really challenged me beyond my imagination and after a long night sleep, in the morning I woke up feeling so fulfilled that I am pursing my dream career to becoming an energy risk professional notwithstanding the fact that the November 20, 2010 exam was tough.

After six weeks I had my result, the results was good but I did not pass the ERP exams because I did not meet the passing requirement from GARP, I was willing to go for it again but I was not financially sound, not until a friend came to my rescue to fully finance all my trips and cost of the ERP exams. In May 2011 I attempted the ERP exams again, without passing but this time around my performance was much better as compared to the previous sitting giving me greater hope and about an inch to successes.

In 2011 I secured the GARP ERP course pack and registered for the November 2011 ERP exam, as usual on 19^th November 2011 I found myself in an exam room at Edinburgh and been told what to do and what not to do, by now I am fully aware of all the rules of the game and tricks involved, for once the morning session was very smooth and interesting to me, instantly I realised that this was my final attempt of writing GARP ERP because I knew what I was doing and could instantly identify the confusing and similar answers of GARP from the correct answers, GARP could not swerve me in any way again, I was more focus, steady, with my bottle of drinking water by my side and answering the questions, one question after another, minute by minute and second by second with more confidence than before and more hope for success. As usual I was very tired after the morning session but I had my launch with me so I relaxed on my sitting table by taking a quick-nap.

The afternoon session was a bit difficult as compared with the morning session but things went from difficult to easy and finally it was all over again, but this time around I was more optimistic that am going to pass my dream ERP exams, six weeks later the result were as I expected, I passed my long-awaited ERP exam and the question I now ask myself is what next for a 25 year old Energy Risk Professional? And what are the prospects for me in the energy industry?

Shafic Suleman
MSc Energy Management
Robert Gordon University
Aberdeen UK

December 23, 2011January 12, 2014

Don’t Go For Perfection, Go For Efficiency in the Energy Risk Professional Exam

Whether you’re studying for the energy risk professional exam or any other exam, one old saying always holds true: Take a shortcut if you know it. In other words: Forget perfection, go for efficiency.

Now what exactly does that mean regarding the ERP? I am of course not advocating that you neglect your studying and hope for the best at the exam, not by any means. What I am trying to drive home is that it really makes no sense whatsoever to obsess over the learning material to the point of getting burnt out and losing interest altogether, but that it’s more important of knowing the most important concepts, and having them at your disposal in the exam.

Just think of learning a new language: Does it matter whether your grammar is perfect, or is it more important that you can order in a restaurant, buy a train ticket or ask directions to the bathroom? You get the point. It’s the same with studying for the ERP. Yes, you must know about all of the concept covered in the original GARP readings. You also have to understand how to apply mathematical formulas to solve for energy related problems. But at the end of the day, you must not be an absolute expert in all of them. You must know enough to pass in the time you have available to prepare for the exam. Remember: You don’t need a 100% score to pass, 70% will do. Out of 140 questions that is still 42 mistakes that you’re allowed to make.

To study more efficiently, I really encourage you to take advantage of the study help and practice material for the energy risk professional exam. If you can, enroll for a class or coaching, or make at least use of the study material that is available online. The classes are a little more expensive, but very good ERP study material (such as the ViveraRISK Concept Checkers for the ERP exam) is available online for the cost of a restaurant dinner for two. This little sacrifice will put you light years ahead in your ERP preparation. Also make sure you master exam strategy, as this is half the rent with the ERP. Solve practice exams and the ERP sample exams available from GARP. A good study plan will round out your toolkit for the ERP and you will be ready to go.

With multiple choice exams such as the ERP, the CFA, or the CAIA, you can be brilliantly prepared or an accomplished expert in the field and still fail the exam if you don’t know how to approach it to get answers fast and eliminated mistakes. Don’t let this happen to you and be smart about your preparation. I wish you all the best on your way to become an ERP!

December 4, 2011December 4, 2011

Will the Energy Risk Professional Designation Help Me Get A Job in the Energy Industry?

I am often asked whether getting the ERP is worth it: In terms of career advancement for professionals already in the energy field, and also for those interested in getting a job in energy. You may be studying for a degree and wonder whether you should do the ERP on the side. Or you may look for a career change altogether and look for a foot in the door.

Employers look for the following assets in job candidates when they hire:

Intelligence, experience, and commitment are important for a candidate to provide value for an employer. You can demonstrate some of these qualities with the ERP, but not all of them. Assume you have passed the ERP exam and fulfill all requirements to use the designation and the three letters ERP after your name. This will show an employer the following:

Attaining the ERP is not an easy endeavor, so this job candidate is smart.
The candidate has spent a considerable amount of time and money to develop additional skills in energy risk management, which shows commitment.

Now here comes the rub: What the ERP cannot make up for is experience.

Employers obviously prefer to hire people with relevant experience in the chosen field. You can also demonstrate lateral experience, for example managing teams or projects in another industry, engineering or technical skills, or other important qualities that can be used in the energy industry.

So if you’re already experienced in energy, having an ERP will definitely up your value for an employer. If you don’t have relevant experience yet, it shows that you’re intelligent and committed, but you should get additional experience in energy before you venture in the field.

As Rockefeller said about the ideal career track: “Pick the company you really want to work for and take any job they give you; this gets you in the door.” If you’re looking for experience, I would suggest you do that, maybe pick a company in your region where your talents are needed and then move up the corporate ladder. The starting point can be an internship, or a position not directly related to what you’re aiming to do later, but al least it gets you in the door and you can demonstrate your skills to your employer.

I hope this helps you assess whether you want to invest in the Energy Risk Professional designation. I personally think it’s a great certification that will definitely help you sooner or later if you’re interested in energy. GARP is a professional body for risk professionals recognized worldwide, with an excellent offering of continued education and access to other events, so I think it’s well worth it.

I hope to see you soon when you prepare for the ERP!

November 29, 2011

Writing the ERP Exam in May? Start Preparing Now!

With the November Energy Risk Professional exam just behind us, many ERP candidates will now register to take the exam in May. I often get emails from candidates asking how to best tackle the ERP challenge: Which study material to use, how to study, and (most importantly) when to start with exam preparations, and I will address these concerns below.

I wrote an article about ERP preparations entitled “How To Master The ERP Exam in 10 Steps” where I outline the study strategy that I used to prepare for the exam in 2010. I believe it is essential to factor in enough time for your preparations, as this part is often overlooked. The original readings of the GARP study material are much deeper than one would expect looking at the ERP registration website. It will take you quite a lot of time to just organize the material, let alone read through it once. The next task is memorizing the most important concepts, and finally, solving practice questions.

If you’re registered to take the ERP exam, you should start preparing at least six months in advance to work through the curriculum comfortably. Sure, you can also do it faster (as outlined in Energy Risk Professional Exam Preparations In A Hurry), but if you work full-time and have other commitments, you should really make enough time available for proper preparations.

I would advise you to use the original GARP readings to get an overview of the material and make notes on your own. For review and to practice the most important concepts, you can use third-party study material such as the ViveraRISK Concept Checkers for the ERP Exam, which will complement your own notes. After reviewing the study material, you should solve as many practice questions as possible to see where your knowledge still lacks. You can then go back and review those subjects again.

Before you start, map out a reading plan for yourself, and make sure you admit at least two months for review and one moth for practice exams and final review. Roughly speaking, such a study plan would be based on the following parameters:

3 months for reading the original readings.
2 months for review of your notes and Concept Checkers
1 month for practice exam and final review

If you can structure your study plan in this way, I believe you will be able to get through the material in time. Of course, using more time, perhaps up to one year, for preparation is only better, but for most of us, this is not possible. I had six months for preparation while working full-time, and passed, so I believe you can do that too.

I wish you all the best for your ERP Preparations! Please do not hesitate to contact me on Facebook or on Energyriskprofessional.com if you have any questions.

November 14, 2011January 12, 2014

Energy Risk Professional Exam Strategy: Speed

I hope you are well on the way in your preparations to take the Energy Risk Professional exam! If you have already solved the GARP sample exams or the full-length Practice Exam, you know that timing is essential to score well. It’s too easy to waste time reading through exam questions again and again, and before you know it, five minutes have passed. This happened to me when I prepared, and I will share with you a strategy to increase your speed when you write the examination.

Note: The ERP exam used to contain 180 questions, but as of 2014, GARP has changed to format to 140 questions spread over 8 hours total. The Practice Exam and this article have been accordingly updated to the new format.

In order to keep track of time, make sure you don’t spend more than 3 minutes and 30 seconds on each question. The morning and afternoon session are four hours each, but you will want to have at least one hour for review in each session, this will leave you with 180 minutes / 70 questions = 2:40 minutes / question in the ideal case. On some you will be faster, on others slower, so a good rule of thumb is to move on after 3:30 minutes. A good way to ensure you don’t spend more is to allocate about one minute to reading the question, and the rest of the time to solving it. I usually put my wrist watch in front of me next to the exam sheet, so I always see where I stand in terms of timing. For example: If you’re at question ten, you should not be more than 25-30 minutes into the session.

The questions are sometimes worded in a lengthy way. Make sure you quickly get the point of the question. A helper may be to quickly glance at the multiple choice answers, so you see whether you have to calculate something or if the question is qualitative. If you have to calculate VAR, make sure you quickly isolate the core components needed for the calculation and perform it as fast as possible. The mark off the answer you found to be correct and move on.

Some questions will be short, so make sure you blaze through them and thank GARP for the present. Quickly browser the answers before you start reading the question, and mark off the right answer, then move on.

There will always be the case where you simply cannot find an answer. Either the calculation does not match any of the answers, it does not make sense, or you simply have no clue. This happens to everyone, so don’t despair. Just select the most likely answer, or guess if you must.

Your speed will greatly increase if you go into the exam well rested. I therefore suggest you take off at least one day prior to the exam and relax a bit. Maybe repeat some of the key concepts in the morning before the exam, then rest in the afternoon. Also make sure you have some water with you in the exam room. IF you’re dehydrated, you will lose speed. All athletes know this, so think of yourself as a high performance athlete when you go into the ERP!

IMPORTANT: Do not leave any questions unanswered when you go through the test. Even if you don’t know the answer, just mark the most likely correct answer, then move on. Mark the questions you’re not sure about to visit later if you have time. In the afternoon session I barely finished in time, and had I left answers unchecked, I could have ended up giving away valuable points.

You will need every single point you can get in the ERP exam to pass, it’s really not an easy exam. Prepare well with the Practice Exam and the ViveraRISK Concept Checkers, keep your calm and a positive attitude during the exam, and you will be sure to perform at your best.

I wish you all the best, and I am keeping fingers crossed for you!

October 27, 2011

What Exactly Is Energy Trading? An Interesting Field For Energy Risk Professionals.

I’m sure every Energy Risk Professional has at one point or another asked himself/herself whether energy trading wouldn’t be a good challenge to get involved in. I certainly have many times and have dabbled in trading more than once 😉 A large part of the energy risk professional curriculum prepares us quite nicely for trading and financial risk management in the field.

Here I put together three brief videos that give an overview about what’s going on today in energy trading. Feel free to take them as a starting point to inform yourself about the subject of trading commodities and equities in the energy sector. Enjoy!

Sunguard: “Risk management a skill in demand for energy trading.”