Due to the effect of global warming, navigation on the Northern Sea Route (NSR) has become a more economical and reliable choice for international cargo transportation. In some ways, global warming has increased the opportunity of shipping activities in the Arctic region and hence the need for ice-capable vessels. NSR shipping provides benefits for international trade, but challenges still exist. Although conventional direct drive propulsion system connected to 2 stroke marine engine is normally considered the most efficient approach for long-range transport, for icebreaking operation which requires prime movers to work at partial load, conventional mechanical propulsion systems generally have poor fuel efficiency and high emissions. Moreover, the harmful gases produced by ships trading in NSR have a significant impact on the Arctic climate. Moreover, a traditional mechanical drive icebreaker with a diesel engine is required to operate at high torque, low rpm during icebreaking operation. Thus conventional diesel engine that isn’t optimised to operate at this point would be inefficient and would produce black carbon due to incomplete combustion, which has the potential to cause ice, snow, and cloud albedo out of proportion with normal pattern, thus lead to serious impacts on the Arctic environment and eco-system. Arctic ship propulsion systems have been developing since the 19th century, with modifications such as the use of diesel electric propulsion systems and nuclear power propulsion systems which can ideally meet the requirements of ice breaking operation (low speed and high torque), however, drawbacks still exist in these systems, such as poor fuel efficiency at low speeds for diesel electric propulsion and for nuclear power, there are limitations such as high initial cost, management of nuclear waste and the fact that the required deep knowledge of nuclear technology is mastered by few countries. Hybrid propulsion is a new technology for ice-capable ships, which can address the partial loading efficiency problem in diesel-electric propulsion by charging and discharging a battery energy storage unit which can allow the ship to work in zero-emission mode in some sensitive areas. In this paper, detailed modelling, primary control strategies (voltage and frequency stability) and efficiency analysis of system components such as the motor, generator, battery and conversion devices etc. are and implemented in software, and then the whole power system is simulated with a secondary control strategy (load power sharing and battery aging concern) in both ice and open water load conditions. The results from the diesel electric system and hybrid system total fuel consumption within a target journey are compared to investigate the advantage of the hybrid system, which show up to a 40% fuel consumption reduction for hybrid propulsion arrangement. A tertiary control strategy for energy management is analysed and implemented in the system to further reduce system fuel consumption.