Energy Risk Professional Exam Preparations In A Hurry

I frequently get questions about the appropriate timing to prepare for the Energy Risk Professional exam. In a perfect scenario, six month would be ideal, as it gives you plenty of time to adequately read the original syllabus, check everything with the ViveraRISK Concept Checkers, and then practice and prepare for the exam with the GARP sample exams and the full-length ERP Practice Exam. But what it you only have a month to prepare until the exam? That’s a tough question…

If you’re under such severe time constraints and want to give it a go, there is still a way do approach preparations. I would of course not recommend to start that late, but if it is your only option, this is what I would advise:

  1. First skim the original readings from GARP, but make sure you don’t lose too much time doing that.
  2. Then, I would very soon start working with the ViveraRISK Concept Checkers and the sample/practice exams. Take the GARP sample exam from 2009 first when you start with the Concept Checkers. After you’re about half-way through, I would take the GARP sample exam from 2010 and last but not least the full-length practice exam.
  3. Try to be done with the Concept Checkers about 10 days before the exam, then take the practice exam again three days before the exam, just to repeat the quant problems and drill them a bit more.

It will be a tour de force for sure, but if you clear the exam under these conditions, kudos to you!!

Please let me know if you have any comments, suggestions, or questions. I wish you all the best for your exam preparations, and I am keeping my fingers crossed for you!

How To Make The Most Of The ERP Practice Exam

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.

Solving as many practice questions as possible is the best way to prepare for the Energy Risk Professional exam in the last stage of preparation. This will point out areas of weakness and will simulate the exam experience. Next to knowing about the important topics covered in the readings, you must also make sure you can manage your time effectively, and you should know what to do in case a question comes up you did not expect.

When I prepared for the ERP in November 2010, I often spent too much time on the math questions, solving them until the end, just to go through the entire exercise. In some cases it is possible to find the right solution by just excluding the answers that do not work. You can also deduct the right answer from the question, for example by determining the approximate value and then comparing that with the answers provided.

Here is a small check list that you could use when you solve practice exams:

  • Solve the practice exam about two weeks before the actual exam. This will give you enough time to look up the topics you would like to look up again.
  • Make sure you stick to the right time window: Each session lasts 4 hours, you want 1 hour of review time in each session . This leaves you with 3 hours for 70 questions in each session. This will allow you to spend about 2:40 minutes per question on average. In order to have enough time, you should be faster than that though because you want to go through the questions again and find errors that you made. As a rule of thumb, never spend more than 3:30 minutes per question.
  • Do not use the practice material to look up answers to the questions when you solve the exam. This defeats the entire purpose. If you are pressed for time, you should still solve the exam without the answers visible to you. When you are finished and check the answers, work through all the answers very diligently to refresh the concepts.
  • Use only the allowed calculators during the practice exam.
  • Mark an answer for each question on the first go. Even if  you are not sure if it’s right, still mark the one you think may be correct and then move on. This is very important: In case you do run out of time, you would not want to have left any answers blank.
  • Take a break between the two exam sessions. Each session lasts for 4 hours, so it is unrealistic to work through the entire 140 questions and still be highly concentrated. Take a break of at least 60 minutes in between.
  • GARP is well-known for confusing exam questions. If you encounter a question you did not expect or that you never heard about, be not surprised. Just apply common wisdom and logic, and exclude the answers you think are wrong.

I hope this helps you preparing for the exam. If you would like to check out the practice exam on energyriskprofessional.com, please click here or on the picture below.

As always, let me know if you have any questions. I wish you all the best for your ERP exam!

How To Read The Required ERP Material Faster

A little less than two months are left until the big day of the ERP exam… I hope all of you are getting through the required reading materials as expected. If you are like me, then you probably underestimated the commitment a great deal. When I took the exam in 2010 I should have started about two months earlier to prepare at a comfortable pace. I was able to make up for lost time with a speed reading technique that I think you could benefit from as well. Let’s get started!

For scientific material I use a reading technique called SQ3R. It is a five-step reading strategy, and the letters are an abbreviation  of the five steps of the strategy: Survey (or Skim), Question, Read, Recite (or Recall) and Review. It helps you transform the reading material into questions that your brain is trying to answer while reading. A similar approach is the foundation of the ViveraRISK ERP Concept Checkers, which are in Q&A format, but you can do this yourself with this technique.

Let’s go through these steps in a little more detail and see how you can use the technique in the Energy Risk Professional preparation:

  1. Survey (2 minutes): Before beginning reading look through the whole chapter or paper of the syllabus. See what the headings are – the major ones and the subheadings; hierarchical structures seem to be particularly easy for our brains to latch onto – check for introductory and summary paragraphs, references, etc. Resist reading at this point, but see if you can identify three to six major ideas in the chapter.
  2. Question (usually less than 30 seconds): Ask yourself what this chapter or paper is about: What is the question that this chapter is trying to answer? What question do I have that this chapter might help answer? Repeat this with each subsection of the chapter, turning each heading into a question. (As a variation of this technique, you can write the important question down; this is called SQW3R)
  3. Read (at your own pace): Read one section at a time looking for the answer to the question proposed by the heading. This is active reading and requires concentration, so it is important that you find yourself a place and time where you can concentrate. Reading in a train or bus may not work. Best is at home at your desk.
  4. Recite/write (about a minute): Say to yourself out loud or write down a key phrase that sums up the major point of the section and answers the question. You have to use your own words, not just copy a phrase or paragraph from the book.
  5. Review (less than 5 minutes): After repeating steps 2–4 for each section you have a list of key phrases that provides a sort of outline for the chapter. Test yourself by covering up the key phrases and seeing if you can recall them. Do this right after you finish reading the chapter. If you can’t recall one of your major points, that’s a section you need to reread.

You should treat the review part as an ongoing process with flash cards or notes made during reading the materials. You should use these cards every few days until the exam to really drill the concepts into your memory.

I hope this helps you speed up the reading process a bit, and I wish you all the best for your ERP preparations!

Addicted To Oil by Thomas L. Friedman

Thomas L. Friedman, author of “The World Is Flat”, made a documentary for the Discovery Channel about America’s dependence on oil. I find the documentary very informative and timely, even though it was made in 2006. Topics like these are not part of the Energy Risk Professional curriculum, but it is still interesting to apply the knowledge learned to popular subjects. The total viewing time is 50 minutes. Enjoy!

Part 1:

Part 2:

Part 3:

Part 4:

Part 5:

The Kyoto Protocol In A Nutshell

CO2 Reduction

CO2 Reduction

The Kyoto Protocol is a somewhat dry topic in the curriculum for the Energy Risk Professional exam. It is still important to understand the basics of the Protocol, the different carbon trading units, joint implementation (JI), and the clean development mechanism (CDM). This article will give a brief overview of all.

The Kyoto Protocol is an international treaty outlining and regulating the efforts of its 37 member countries to reduce their greenhouse gas (GHG) emissions by 2012. It is legally binding and was entered into force on 16 February 2005. The Kyoto Protocol is linked to the United Nations Framework Convention on Climate Change (UNFCCC). The major feature of the protocol is that it sets binding targets for its 37 industrialized countries and the European community for reducing greenhouse gas emissions: These should be reduced an average of 5% against 1990 levels over the 5-year period 2008-2012. Each country and its industries are assigned certain targets based on historical emission data that they agreed to meet by the end of the 5-year period. The United States, Japan and Australia (among others) are not member countries of the Kyoto Protocol, but are implementing their own measures to reduce greenhouse gases with less regulations and accountability.

Below a graphic of current Kyoto Protocol member countries:

Kyoto Protocol member countries

The Kyoto Protocol, like the UNFCCC, is also designed to assist countries in adapting to the adverse effects of climate change. It facilitates the development of techniques that can help increase resilience to the impacts of climate change. The Adaptation Fund was established to finance adaptation projects and programmes in developing countries that are Parties to the Kyoto Protocol.

Under the Kyoto Protocol, the following emissions are considered greenhouse gases (GHG): Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs), and Sulphur hexafluoride (SF6). It is important to note that Hydrogen Sulfide (H2S) is not considered a GHG. Countries must meet their targets primarily through national measures, such as more efficient combustion or reduction of emissions in general through use of cleaner fuel. However, the Kyoto Protocol offers them an additional means of meeting their targets by way of three market-based mechanisms:

  1. Emissions trading, known as “the carbon market”
  2. The Clean development mechanism (CDM), which involves investment in sustainable development projects that reduce emissions in developing countries.
  3. Joint implementation (JI), which enables industrialized countries to carry out joint implementation projects with other developed countries.

These mechanisms help stimulate green investment and enable parties to meet their emission targets in a cost-effective way. In order to account for progress and make trade possible, there are three standardized instrument units used, each equal to 1t of CO2:

  1. A removal unit (RMU) of GHGs on the basis of land use, land-use change and forestry (LULUCF) activities such as reforestation.
  2. An emission reduction unit (ERU) generated by a joint implementation (JI) project in another country.
  3. A certified emission reduction (CER) generated from a clean development mechanism (CDM) project activity in a developing country.

Transfers and acquisitions of these units are tracked and recorded through the registry systems under the Kyoto Protocol. An international transaction log ensures secure transfer of emission reduction units between countries.

The heart of the Kyoto Protocol is the Clean Development Mechanism (CDM). It allows a country to implement emission-reduction projects in developing  countries. Such projects can earn certified emission reduction (CER) credits that can be re-sold in the carbon market. A CDM project must provide emission reductions that are additional to what would otherwise have occurred. The projects must qualify through a rigorous and public registration and issuance process.

The CDM is the first global, environmental investment and credit scheme of its kind, providing a standardized emissions offset instrument, CERs. A CDM project activity might involve a rural  electrification project using solar panels or the installation of more energy-efficient boilers. The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction or limitation targets.

Joint implementation (JI) allows a country to earn emission reduction units (ERUs) from an emission-reduction or emission removal project in another country, which offers parties a flexible and cost-efficient means of fulfilling a part of their Kyoto commitments, while the host party benefits from foreign investment and technology transfer.

As with all international treaties, the Kyoto Protocol is not all fun and games. Unfortunately, there are quite severe challenges that are not easy to solve:

  1. Verification. Many countries were late in setting up verification procedures and technologies, slowing CDM implementation.
  2. Controlling sale of “hot air”. The baseline year is 1990, which coincides with the fall of communism. All formerly communist countries are far below their baseline targets, so Kyoto designers feared downward pressure on emissions credits. The 1990 figure is meaningless for those countries, so their baseline under the NAP was set close to their current emissions targets.
  3. Quality and price of carbon credits. Large spread between CERs and EUAs (€ 11-30), largely due to uncertainty with CERs and associated transaction cost. Convergence is expected, as both credits can be applied to the same goal.
  4. Enforcing compliance. Penalty for noncompliance set at €40 per metric ton CO2 above the cap in phase one (2005-07) and €100 in phase two (2008-12).
  5. Integrating various trading platforms.
  6. CDM bottleneck. Lack of personnel, piecemeal approach. Number of new protocols delaying projects in the pipeline.

For the Protocol to be successful, it is important that the efforts of its member countries can be tracked credibly, and that the targets are enforced in an effective way.

Did you enjoy this post? Please leave a comment in the ERP group on Facebook, and check out these related posts also:

 

The Risk of Knowing About the GARP’s ERP Program

Note from Alex: This is a guest post from Richard Jide Adisah. Richard is an ERP candidate in Ghana and writes about his experiences and preparations for the ERP exam. Enjoy!

If you are on this blog and reading this post, you probable know all the technical stuff you need to know about the Energy Risk Professional Program. So I won’t bore you with details and technicalities. Let me tell you about what knowing about the ERP has done to my life.

I discovered ERP in a local newspaper in Ghana. A unique institution set up by the Central Bank in Ghana (“Bank of Ghana”) was offering an energy finance training programme designed based on the ERP curriculum. Immediately I was hooked. I wanted to know more, and when I enrolled in the program, my appetite grew more. Soon enough though, I discovered that the available study materials are few and far between, and so are practice questions, fellow candidates, and even financial risk training for the energy industry as a whole.

Energy risk management knowledge is quite challenging to master and very few books cover enough background for a candidate to develop a comprehensive understanding. And so the more you learn, the more you want to know.  The techniques are relative new and not well-tested  and very few authors express deep enough confidence in their own models to encourage widespread adoption.

Though I am yet to take the exam, I have had considerable discussions with many industry professionals some of whom have successfully been ERP certified (including Alex Janis) and my conviction is yet to change. ERP is designed by GARP to mimic the energy industry. Studying it involves continuous exploration for new ideas, new techniques and cutting edge understanding of a continuously evolving field.

It’s challenging yet exciting. It’s broad yet highly specialized. I have enjoyed every bit of the ERP journey and I  tell you this for sure, I am only beginning. The only thing I keep hearing from everyone is that you need more time to study, be strategic, identify the key link between concepts and AIM statements and always ask yourself: “Where is the risk?”

I guess everyone agrees with me, knowing about the ERP creates in you an insatiable appetite to know more. It’s relatively new, it’s exciting but passing the exam requires a strategic and smart approach to mastering the skills and concepts.  Soon enough though, I might have the chance to find out, how right I am.

Cheers.

Richard Jide Adisah

Work Smarter Not Harder For The ERP Exam

The Brain

The Brain

The Energy Risk Professional exam is a daunting task without a doubt: Looking at the required reading list alone can make your head spin. When I studied for the ERP I repeatedly wondered what I had gotten myself into. But still, I was happy to pass and in retrospect I believe this is doable for anyone with the right study approach and attitude.

That begs the question: Does preparing for the ERP exam really have to be so difficult?

History has shown that great accomplishments do not have to be extremely hard per se. In medicine for example, simply washing one’s hands have saved nearly as many lives as the introduction of penicillin.

I am not saying the ERP exam is EASY, I am proposing to optimize the exam preparation approach. The old adage of working smarter, not harder, holds true for the ERP as well. In my opinion, the most important ingredients for exam success are:

  1. A real interest in the subject matter. For those passionate about energy, learning the ins and outs about it will be fascinating.
  2. Enough time. If you plan for at least six months to get in shape for the exam, this should suffice.
  3. A good study plan. You need to intelligently structure both the study material as well as your personal time to get consistent results. This also includes a well thought-of exam strategy, which may be the most important part.

I hope you don’t make studying for the ERP too hard for yourself. Yes, it is tough, but you can have fun on the way and it is by no means impossible to pass. Once you have jumped the initial hurdle of the mountain of study material you have  to work through, studying will be enjoyable as soon as you have gotten the hang of it.

I encourage you all to participate in the discussion about this topic in the ERP Group on Facebook, and look forward to hearing your opinions!

72 Free Practice Questions For The ERP Exam

Studying for the ERP exam demands a lot of organization and self-discipline. Once you have read all the required study material the three most important things for exam success are:

  1. Practice
  2. Practice
  3. Practice

In the pdf file below I summarized the questions I found hardest from the ERP practice exam that was available from GARP in 2010 and  added some of my own questions that came up when I studied. Please feel free to download it from here:

ERP Exam questions summary

I hope this helps you in your exam preparation. I wish you all the best!

Alex

The Book: Renewable Energy In A Nutshell

Renewable energy is a hot topic. Especially since many developed nations have declared to shut down their nuclear plants in favor of renewables. It has long been evident that fossil fuels will not last forever, but in order to compete with them, alternative sources of energy need research and investment to increase their reliability and efficiency.

Despite their increasing popularity, renewables are still largely misunderstood.

There is much more than solar power and hydroelectricity to renewable energy. As renewables are such a large and relatively new topic, it is quite difficult to get an overview. At least that is what I encountered when I studied for the ERP.

With Renewable Energy In a Nutshell I organized the most important concepts of renewables into a comprehensive format by removing the information I found confusing when getting started. On 24 concise pages, in only 90 minutes of reading time you can familiarize yourself with the six forms of renewable energy, or review the subject altogether for your exam prep. I believe it would be difficult to condense the topic more while still maintaining an enjoyable form.

I encourage you to get a free sample chapter of Renewable Energy In A Nutshell from the Renewable Energy Hub. If you have any comments or questions, please let me know!

Renewable Energy In A Nutshell cover