2016 ERP

Candidate Guide

Earning the ERP designation

proves that you have the
commitment and dedication
necessary to gain expertise in
the energy domin.
- Dipendu Kar, ERP

2016 ERP Candidate Guide

The Energy Risk Professional (ERP) is the premier certification
for those in the energy field.
The ERP was developed in response to the growing need for professionals who understand
the complexity of energy markets and their related risks. Whether you currently work in the
energy industry or are interested in transitioning to a career in energy, earning the ERP
designation can help accelerate your career growth.
ERPs understand how global energy markets operate and influence one another. The ERP
curriculum covers:
Exploration, production, transportation, storage, refining, processing and distribution
of physical energy commodities
Structuring and valuation of financially traded energy products
Identification and management of market, credit and enterprise risk management
The ERP Program is guided by a panel of leading energy risk practitioners whose
expertise spans the full range of disciplines in the energy space. Updated annually, the
ERP curriculum is derived from todays industry standards and best practices.
EARNING YOUR ERP CERTIFICATION

Once certified, ERPs maintain their skills and

The first step to becoming an ERP is

knowledge through a mandatory Continuing

passing the two-part ERP Exam. Both parts

Professional Development (CPD) program.

of the ERP Exam are offered twice a year,

GARPs CPD program provides a formal

in May and November. Once you pass the

means to meet the growing demands of their

ERP Exam Part I, you have four years to

profession while ensuring the integrity of the

pass Part II.

certification. CPD offers ERPs a framework

to stay ahead of industry trends. The CPD

After achieving a passing score on both

program requires 40 credit hours to be

parts of the ERP Exam, a candidate must

earned every two years.

satisfy a work experience requirement

in order to be certified. Candidates must
demonstrate a minimum of two years of
full-time work experience in the area of

ERP Exam Part I

4 hours/80 Questions

ERP Exam Part II

4 hours/60 Questions

Demonstrate 2 years
Related Work Experience

Mandatory Continuing
Education 40 hours/2 years

energy risk management or another related

field including, but not limited to: trading,
portfolio management, faculty academic,
industry research, economics, auditing,
risk consulting, and/or risk technology. A
sample list of job titles that GARP uses for
ERP certification purposes is available by
contacting memberservices@Garp.com

2016 Energy Risk Professional (ERP) Candidate Guide

Who should consider ERP certification?

ENERGY PROFESSIONALS

STUDENTS

Professionals in the energy space earn the ERP

Students with an interest in a career within the

certification to broaden their knowledge of the

energy field may elect to sit for the ERP Exam

complex energy value chain, to sharpen their

during or immediately after completing their

ability to identify, analyze and manage risk,

studies. The ERP program can help them to

and stay ahead of emerging trends across the

complement their prior coursework or to develop

energy industry, particularly in areas where they

a base of specialized knowledge that was not

have less direct professional experience.

available in their university curriculum. Students

For younger energy professionals near the start

recognize the benefit of signaling to prospective

of their careers, earning your ERP is an excellent

employers their dedication to learning about the

way to prove youre ready to take on substantial

energy marketplace through engagement in the

responsibilities in the energy space and to

ERP Program.

demonstrate a commitment to the industry.

CAREER CHANGERS
Career changers, such as those previously
working in non-finance, non-risk, or nonenergy roles, become ERPs in order to develop
specialized, practical knowledge in the rapidly
growing global energy space. Undertaking the
rigorous course of study to become an ERP
signals commitment to the energy sector.

Exam Structure and Content

GARPs Energy Oversight Committee, a panel of the leading energy risk practitioners worldwide, supervises
the development of the ERP Exam. Current members include academics and practitioners with expertise in risk
consulting, risk management, commodity trading and quantitative analysis from both the physical and financial
energy markets. The ERP curriculum is developed in conjunction with the Energy Oversight Committee to address
the fundamental knowledge, skills and abilities necessary for professionals who manage risk in the energy industry.

ERP EXAM STRUCTURE

The ERP Exam is a two-part, paper and pencil multiple choice exam. The ERP Exam Part I is 80 questions and
is offered in the morning. The ERP Exam Part II is 60 questions and is offered in the afternoon. Candidates are
allotted four hours to complete each Exam and have the option to complete the Exam in one or two cycles. The
exams are offered in English, twice a year in May and November at approximately 90 exam sites around the world.
Test weights and questions are structured to balance intellectual rigor against exam validity and reliability, two
important characteristics of any professional certification exam.

An ERP holder certainly has a

level of knowledge on the
physical and nancial side of
the energy realm that is well
above what Id see from a
normal candidate.

- Lisa Zembrodt, ERP

Exam Structure and Content

The ERP Exam is a comprehensive, practice-oriented assessment that spans both the physical and financial
energy markets. Candidates are expected to demonstrate an understanding of important concepts across
several broad areas of study. The test weights for the 2016 ERP Exam are as follows:

ERP Exam Part I

Introduction to Energy Commodities
and Risk Management | 10%
Introduction to Energy Commodities
and Risk Management
Linking Physical and Financial Energy
Markets
Risk Management Overview

Natural Gas and Coal Markets | 25%

Physical Properties
Transportation and Storage
Global Natural Gas Markets and
Price Dynamics
Global Coal Markets and Price Formation

Crude Oil Markets and

Refined Products | 35%
Exploration, Production, and Project
Development
Petroleum Refining
Global Benchmarks and Price
Formation
Crude Oil Transportation and Storage
Unconventional Oil

Electricity Markets and

Renewable Generation | 30%
Economics of Electricity Markets
Global Market Design
Transmission and Distribution
Analytical Tools and Structured
Solutions for Electricity Markets
Renewable Generation and Integration
Emissions

ERP Exam Part II

Risk Management Tools | 60%

Quantifying Market Risk

Price Formation in Energy Markets | 15%

Statistics and Probability
Technical Properties of Energy
Price Formation
Fundamental Characteristics of
Commodity Price Formation

Credit Risk and Assessment

Counterparty Credit Exposures,
Pricing, Mitigation and Documentation
Country Risk Determinants,
Measures, and Implications
Enterprise Risk Management
Quantitative and Qualitative
Risk Metrics

Financial Energy Products | 25%

Business Ethics and the GARP

Code of Conduct

Forwards and Futures

Energy Commodity Swaps
Options and Option Strategies
Global Regulation of Financially
Traded Energy Products

2016 Energy Risk Professional (ERP) Candidate Guide

Top Sites for the ERP Exam:

Houston

Singapore

Dubai

Sydney

London

Lagos

Calgary

Munich

New York

Mumbai

Geneva

New Delhi

Registering
for the ERP
Exam

2016 Energy Risk Professional (ERP) Candidate Guide

In 2016, the ERP Exam will be offered on May 21 and November 19. The cost to register for the Exam
varies based on the registration period. You can register for the ERP Exam by visiting www.garp.org/erp
FEES
When registering for the ERP Exam for the first time, a candidate pays a program enrollment fee and an exam fee.
Once enrolled in the ERP Program, only the exam fee is required for subsequent ERP Exam registrations.*
The enrollment fee covers basic costs associated with developing and administering the ERP Program and the
ERP Exam. Initial enrollment in the ERP Program includes a complimentary one-year GARP Individual Membership
(a US $195 value).
The exam fee is the cost to sit for each exam and varies based on the registration period. Current exam fees
associated with each registration period are as follows: Early Registration US $350; Standard Registration US $475;
Late Registration US $650.
Fees can be paid via secure online payment (if drawn on a U.S. Bank and payable in U.S. dollars), or by wire transfer.
More information about fees can be found on our website.
*Once a candidate passes the ERP Exam Part I, he/she must then pass the ERP Exam Part II within 4 years. If he/she
does not, they will have to re-enroll in the Program and pay all applicable fees as a new candidate, including taking
and passing the ERP Exam Part I again.

FEE SCHEDULE

Early Registration

New Candidate
(Part I)

Returning Candidate
(Part I/Part II)

$650

$350

May 2016 Exam: 12/1-1/31

Enrollment Fee: $300

Enrollment Fee: $0

Nov 2016 Exam: 5/1-7/31

Exam Fee: $350

Exam Fee: $350

$775

$475

Standard Registration
May 2016 Exam: 2/1-2/29

Enrollment Fee: $300

Enrollment Fee: $0

Nov 2016 Exam: 8/1-8/31

Exam Fee: $475

Exam Fee: $475

$950

$650

Late Registration
May 2016 Exam: 3/1-4/15

Enrollment Fee: $300

Enrollment Fee: $0

Nov 2016 Exam: 9/1-10/15

Exam Fee: $650

Exam Fee: $650

DEFERRALS
An ERP candidate may only defer each exam registration once to the next test date. Please note:
A deferral to the next examination date must be submitted by the last day of registration. For example, the
last day of registration for the May Exam is April 15, and for the November Exam, the last day of registration is
October 15.
There is an administrative processing fee of US$100 that accompanies each exam deferral. This fee is payable
by credit card only at the time of your deferral request.
Suggested readings will change from year to year.
More information on deferring the ERP Exam can be found on GARPs website.

10

Before Registration: A Checklist

Before registering for the ERP Exam, we suggest that you:

Ensure that your passport or drivers license will not expire by

the date of the Exam, and the name on your passport or drivers
license exactly matches the name under which you are
registering for the Exam. (Only a current and valid passport or
drivers license, which must include a photograph of the ERP
candidate, will be accepted for indentification purposes.)
Familiarize yourself with key ERP Exam deadlines.
Learn about GARPs Exam Policies.
Decide where to take your Exam.
If needed, request special accommodations for Americans with
Disabilities (ADA), or request an alternative exam date for
religious reasons (RAD).

11

Preparing for the ERP Exam:

GARP provides study resources,

The time needed for exam preparation

practice exams, and information on

will vary and will be based on your

approved third-party Exam Preparation

professional experience, general level

Providers to help ERP candidates get

of knowledge of the energy markets,

ready for the Exam. Due to the volume

reading comprehension aptitude and

of material covered in the Exam, we

other factors. For past Exams, a majority

suggest that you create a weekly study

of candidates report spending anywhere

schedule to spread out study hours over

between 150 to 400 hours preparing for

an extended period. Cramming for the

the Exam.

Exam in the few weeks leading up to it is

not recommended.

Study Materials

ERP Study Guide outlines all required readings for the ERP Exam.
In addition, key concepts appear as bullet points at the beginning of each
section of the Study Guide and are intended to help you identify the major
themes and knowledge areas associated with a particular section.

ERP Learning Objectives document provides a comprehensive

framework to guide candidates in their self-study preparation for the ERP
Exam. It contains information and approximate weightings for each of the
broad knowledge domains covered by the Exam, specific curriculum
readings associated with each knowledge domain, and individual learning
objectives for each reading. Since every ERP Exam question maps to at
least one learning objective, the ERP Learning Objectives document is an
important study resource and should be referred to regularly during exam
preparation.

ERP Practice Exam candidates are encouraged to download and take the
practice exams, which are available on our website and are free for paid
candidates. These practice exams will provide you with a good sense of the
questions types to expect when sitting for the actual ERP Exam, and will
allow you to estimate how much time you can expect to spend answering
individual questions. Each practice exam contains multiple-choice questions,
and the file includes candidate answer sheets, exam questions, exam answer
keys, and detailed explanation for all answers.
It is strongly recommended that candidates mimic exam day conditions
when taking each Practice Exam.

ERP Books cover topics related to the physical and financial energy
markets. The ERP Exam Part I Books cover the following topics: energy
commodities and risk management, crude oil markets and refined products,
natural gas and coal markets, and electricity markets and renewable
generation. The ERP Exam Part II Books cover the following topics: price
formation in energy markets, financial energy products, and risk
management tools.

Sample Study Plan- available on the GARP website, the sample study plan
offers you a framework which you can customize. We encourage you to use
this study plan as a foundation and modify based on your schedule and
areas of strength or weakness.

13

2016 Energy Risk Professional (ERP) Candidate Guide

EXAM PREPARATION PROVIDERS

STUDY GROUPS

You ma
may wis
wish to
to st
study th
the ex
exam

While the ERP curriculum is designed

material with the

the as
assistance of an
an ER
ER P

to be a self-study program, many find

Exam Pr
Preparation Pr
Provider. Ex
Exam

that studying with their peers positively

Preparation Pr
Providers ma
may off
of fer cou
courses

impacts their exam preparation. You

online or
or in
in pe
p e r so n .

can connect with other ERP candidates

to form study groups by joining

GARP pr
provides a li
list of ap
approved ER
ER P

our Facebook or LinkedIn groups.

Exam Pr
Preparation Pr
Providers on
on ou
our

Alternatively, many GARP Professional

websit
ite
e as
as a se
ser vice to
to ER
ERP ca
candidates.

and University Chapters now facilitate

Please no
note tha
that GA
GARP do
does no
not en
e n d o r se ,

study group sessions that enable ERP

promote, re
review or
or wa
warrant the
the acc
accu
u ra c y

candidates in the same city or region to

of the
the pr
products or
or se
ser vice
cess off
of fered by
by

meet each other.

providers of ER
ERP re
related in
info
forrmation, no
nor
does it en
endorse an
any pa
pass ra
rates cl
claimed by
by
the
th
e Ex
Exam Pr
Preparation Pr
Provider. Fu
Furth
the
er,
GARP is
is no
not re
responsible for
for an
any fe
fees or
or
cossts pa
co
paid by
by the
the us
user to
to an
an ER
ERP Ex
Exam
Preparation Pr
Provider.

2016 ERP Exam

Study Guide
The globally recognized designation for risk
professionals in the energy industry

2016
ERP Part I
Practice Exam

14

GARP offers a number of free

study resources to candidates
including: the Study Guide, Learning
Objectives, and Practice Exams

2016 ERP

Learning
Objectives

2016 Energy Risk

Professional (ERP)
Exam Part I Volume I

Introduction to Energy Commodities and Risk Management

Crude Oil and Refined Products Markets
Natural Gas and Coal Markets

Sitting for
the ERP
Exam

2016 Energy Risk Professional (ERP) Candidate Guide

EXAM LOCATIONS

CALCULATORS

The Exam is offered in person at approximately

Only GARP-approved calculators can be used

90 exam sites around the world. A complete list

during the Exam. Use of a non-authorized

of exam sites is available on the GARP website.

calculator during the Exam will result in the

candidates answer sheet not being graded, and
the candidate will receive no score for the Exam.

IDENTIFICATION

Candidates may not consult the operators manual

for their calculator during the Exam. Calculator

Only a current and valid government-issued

memory must be cleared prior to the start of the

passport or drivers license, which must

Exam.

include your photograph, will be accepted for

The calculators approved for use during the ERP

identification purposes on exam day. The name on

Exam are:

your passport or drivers license must be exactly

Hewlett Packard 12C (including the

the same as the name on your exam registration.

HP 12C Platinum and the Anniversary

For more information, visit the GARP website.

Edition)
Hewlett Packard 10B II
Hewlett Packard 10B II+
Hewlett Packard 20B
Texas Instruments BA II Plus
(including the BA II Plus Professional)
Please review GARPs calculator policy on the
website in advance of exam day.

16

PROHIBITED ITEMS

EXAM RESULTS

In order to maintain the integrity of the testing

Exam results are pass/fail and are

process, no electronics, including wearable

available approximately six weeks after

technology, are permitted. Additionally,

the Exam is administered. Candidates are

baggage of any kind, writing instruments or

provided with quartile results that enable

pencil cases are not allowed in the testing room.

them to see how they scored on specific

There will be a designated area away from

areas relative to other candidates.

the testing room can be accessed during the

examination.
A full list of permitted and prohibited items can
be found on the GARP website.

SCORING THE EXAM

There are no penalties for incorrect answers.
Candidates sitting for both parts of the ERP Exam

DURATION OF THE EXAM

in the same exam administration must pass the

ERP Exam Part I in order to have Part II graded.

The ERP Exam Part I and the ERP Exam Part II

The passing score is determined by the Energy

are each four hours long. The ERP Exam Part I

Oversight Committee.

consists of 80 multiple choice questions and the

ERP Exam Part II consists of 60 multiple choice
questions. Part I is offered in the morning session
and Part II in the afternoon session of each exam
administration.

EXAM VIOLATIONS
GARP seriously reviews each and every Exam
Violation Report. We have listed some of the
violations that have resulted in a Candidate
Violation Report being filed and, subsequently, a
candidates Exam not graded:
Candidate began the Exam early
Candidate opened the Exam booklet early

What to Bring
on Exam Day:
Printed Exam Admission Ticket
Current non-expired government-issued
photo identification - either a drivers
license or passport
Approved calculator
The following items may be carried in your pockets
or in transparent plastic bags. Plastic bags must
be placed under your chair and may be accessed
during the Exam.

Candidate continued to write after the

session ended
Candidate brought a cellular telephone or
smartphone into the exam room
Candidate caught cheating
Candidate violated GARPs calculator policy

Wallet (or money purse)

Calculator batteries
Pencil sharpeners
Eye glasses
Earplugs
Medicine
Tissues
Other medically necessary items

Food and drink containers may not be opened

in the testing room. All food and drinks must be
consumed outside the testing toom.
17

Using the ERP

to Build Your
Career

ERPs have a competitive advantage that allows them to accelerate their careers
across many facets of the energy space. Those who pass the ERP Exam demonstrate their
understanding of the unique link between physical energy commodity markets and the financially traded
instruments, as well as their mastery of the measurement and management of energy risk.

BENEFITS OF BECOMING A CERTIFIED ERP

Whether you work in the energy industry or are interested in transitioning to a career in energy, earning
your ERP can help accelerate your career. Becoming an ERP demonstrates your commitment to the energy
markets. It empowers you with the knowledge to identify and analyze a variety of risk-related problems
across the energy value chain, and youll have the confidence to pursue assignments with increasing levels
of responsibility.

The ERP has been crucial to allowing

me to carry on conversations with clients,
ask the right questions and dig even
further into the industry I love. - Jason Williams, ERP

19

2016 Energy Risk Professional (ERP) Candidate Guide

JOIN AN ELITE GROUP

Becoming an ERP means joining a network of
similarly-minded professionals, allowing you to
expand your professional career opportunities
within the fields of finance and energy.
Candidates for the ERP designation work in a
number of industries, including:
Energy companiesincluding
oil, power, natural gas and LNG,
renewables
Financial Institutionsincluding
commercial and investment banks,
asset management firms, hedge funds
Consulting firms
Technology firms
Government agencies
CONFIRM YOUR
ACHIEVEMENTS
DEMONSTRATE YOUR
COMMITMENT
Mastering the ERP curriculum requires discipline
and represents a significant commitment to the
risk management profession and energy markets.
Because of this, ERPs are considered leaders in

Real-world experience is an essential

component of attaining ERP certification.
Candidates are required to demonstrate related
professional experience, so becoming an ERP
means considerably more than passing an Exam.

the industry with a strong commitment to

professional excellence.
ENHANCE YOUR
REPUTATION
All ERPs are expected to adhere to principles
that promote the highest levels of ethical conduct
and disclosure beyond following the letter of
applicable rules and regulations. Employers
know that ERPs will help safeguard their firms
reputations.

20

Frequently Asked Questions

Q.
A.

How much time is needed to prepare for the ERP Exam?

Candidates preparation times will vary based on their prior professional experience
level, academic backgrounds, and familiarity with the concepts tested on the curriculum.
For past exams, a majority of candidates report spending anywhere between 150 to 400
hours preparing for the Exam.

Q.
A.

How much work experience is required before sitting for the ERP Exam?
There are no educational or professional prerequisites to sit for the ERP Exam. However,
there is a work experience requirement you must fulfill before becoming certified. To
review ERP certification requirements, visit the GARP website.

Q.
A.

How quantitative is the ERP Exam?

The ERP Exam is not meant to be a rigorous quantitative exercise that requires
memorization of highly complex formulas. ERP candidates are, however, expected to
have an understanding of fundamental quantitative concepts and relationships covered
in the core readings. Candidates should be prepared to solve a number of
mathematical calculations based solely on their understanding of these fundamental
concepts. While we do not provide a list of formulas for the Exam, in some cases,
particularly for more complex or obscure calculations, information about terms or values
within an equation may be provided to the candidate in the question.

Q.
A.

What are my career prospects after becoming an ERP?

By choosing the ERP, you are selecting the most globally respected designation
available to those who work in energy markets. As global economies continue to
rebound and population grows, global energy requirements will expand, creating
demand for highly trained energy risk professionals. Earning your ERP designation not
only broadens your skill set, it demonstrates a standardized level of industry knowledge,
making you a recognized leader in the energy space.

21

2016 Energy Risk Professional (ERP) Candidate Guide

Q.
A.

What is the difference between the FRM and the ERP?

Many of the techniques used to evaluate and manage market, credit, and operational
risk in traditional financial markets have been adopted and applied to energy risk
management. However, the factors that drive price formation, volatility, and risk in
physical energy commodity markets are quite different from conventional financial
assets like equities, fixed income and foreign exchange. In addition, forwards, futures,
and swaps have been more heavily emphasized in the ERP curriculum given their
extensive use in the energy market. Finally, the capital investment and highly leveraged
physical facilities required in energy production, generation, distribution and storage
infrastructure creates a unique set of financial, operational and safety challenges not
found in the financial markets. A unique curriculum that integrates knowledge about
physical energy markets, financially traded products used in energy trading and hedging
activities, and risk management applications all characterize and distinguish the ERP
from the FRM.

Q.
A.

In what languages can I take the Exam?

The only language that the Exam is administered and instructions read on exam day
is American English. The dialect used in the examination is American English. GARP is
aware that not every ERP candidate has American English as his or her native language.
In the exam development process, GARP strives to ensure that questions are written in
a clear, concise form and avoid the use of colloquialisms or other terms or phrases that
may be unfamiliar to a non-native American English speaker.

Q.
A.

Do I have to be a member of GARP to sit for the ERP Exam?

No. Membership is not required to sit for the ERP Exams. However, you will receive
complimentary membership privileges as an Individual Member of GARP for one year
upon paid enrollment in the ERP Program.

Q.
A.

Is continuing education mandatory for Certified ERPs?

Yes. Certified ERPs can continue to use their ERP designation as long as they are
fulfilling the continuing education requirement for the program. The CPD program is
based on 24-month cycles and participants are required to earn 40 credits each cycle.
As a general rule, 60 minutes spent on an educational activity is equal to 1 CPD credit.

22

Notes

23

Creating a culture of risk awareness

Global Association of Risk Professionals
111 Town Square Place
14th Floor
Jersey City, New Jersey 07310
U.S.A.
+ 1 201.719.7210
2nd Floor
Bengal Wing
9A Devonshire Square
London, EC2M 4YN
U.K.
+ 44 (0) 20 7397 9630
www.garp.org

About GARP | The Global Association of Risk Professionals (GARP) is a not-for-profit global membership organization dedicated to
preparing professionals and organizations to make better informed risk decisions. Membership represents over 150,000 risk
management practitioners and researchers from banks, investment management firms, government agencies, academic institutions,
and corporations from more than 195 countries and territories. GARP administers the Financial Risk Manager (FRM) and the Energy
Risk Professional (ERP) exams; certifications recognized by risk professionals worldwide. GARP also helps advance the role of risk
management via comprehensive professional education and training for professionals of all levels.

2016 Global Association of Risk Professionals. All rights reserved.