Shepherd argues for grace sovereignly bestowed in the first part of the covenant and for the necessity of faith and repentance in the second part of the covenant when he writes:
Election does not mean that we can live by sight. Election does not mean that we have insight into the decree of God so that we can relax. Rather, election calls upon us–election summons us–to live by faith in Christ, to walk in the Spirit, to be in fact the people of the covenant. Election establishes covenant; that’s the point. The gifts are all ours by grace, and they are enjoyed in the way of faith (2 Peter 1:3,5).
John Murray–Shepherd’s predecessor–writes similarly:
The fear of the Lord, the keeping of his covenant, and obedience to his commandments are the means through which and the conditions upon which those who have received the pledge of God’s faithfulness may entertain the assurance and comfort of His faithfulness.