For very short crossings, there is a lot be said for chain ferries, since they may be hauled by relatively clean and green electric power rather than by diesel engines.
For slightly longer routes, battery power is now available.
In my view, existing diesel power powered ferries should continue in service for their economic lives, perhaps being re-deployed on other routes.
Newly built ferries should be electric, unless there is some compelling reason to do otherwise.
The two chain ferries I am familiar with, Torpoint and Cowes, as far as I know, rely on the chain dropping down behind the ferry so other vessels can pass. As a result, they are diesel powered on board (one I think with electric transmission and one with hydraulic), rather than from a motor on shore. I imagine it would be possible to use batteries or some form of battery/mains hybrid, but mains only operation seems non-viable.