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

Energy-Risk-Professional-lessons-learned

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:

    1. 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.
    2. 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.
    3. 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!

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.

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 19th 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

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!

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!

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

Energy Trading Technology

Energy Trading Technology

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.”

Overview of Energy Trading at Shell: What does it take to trade energy at Shell? “Live 100 years and not get bored.”

Shell: “Reponsiblity is encouraged every hour of the day.”

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: