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.