Density functional theory calculations have been performed on stoichiometric and intrinsically defective p-type transparent conducting oxide SrCu2O2, using GGA corrected for on-site Coulombic interactions (GGA+U). Analysis of the absorption spectrum of SrCu2O2 indicates that the fundamental direct band gap could be as much as ~0.5 eV smaller than the optical band gap. Our results indicate that the defects that cause p-type conductivity are favoured under all conditions, with defects that cause n-type conductivity having significantly higher formation energies. We show conclusively that the most stable defects are copper and strontium vacancies. Copper vacancies introduce a distinct acceptor single particle level above the valence band maximum, consistent with the experimentally known activated hopping mechanism.