The boundary conditions of ship propulsion layout definition are changing as a result of growing environmental concerns and tightening regulations, penetration and maturing of technologies rarely applied in the past such as hybrid/ full electric propulsion, battery technology. Simple sizing of main machinery according to specified sailing speed for a diesel- direct layout is no longer guaranteed to satisfy the considerations above in combination with ever- evolving customer requirements regarding vessel operation and performance. The degrees of freedom opening up by electrification of propulsion systems need to be considered in tandem with the vessel intended operating conditions, so that propulsion layout definition follows a holistic optimization approach, namely choosing and sizing the propulsion system for the specific vessel and mission profile. Moreover, the suitability of technologies with lower readiness level such as fuel cells, alternative fuels etc. is difficult to evaluate due to limited experience and commercial availability. Towards this goal, in the paper will be presented a model- based methodology of propulsion layout optimization using high- level subsystem models considering mechanical and electrical energy flows, using as inputs typical information available at initial project phase. The method is intended to be vessel- independent, but in this paper will be considered a RoPax ferry application. Following a description of the modelling framework and the various electrical and mechanical components, different propulsion layouts (mechanical, electrical and hybrid) are evaluated against environmental and operational performance criteria for the examined test case. Metrics such as fuel consumption and system operability are compared, sizing of equipment is performed and operating scenarios are evaluated, resulting in a clearer picture of the merits and demerits of the candidate propulsion configurations in an early stage.