From molecular sensors to perfect lenses, plasmonic devices promise a wealth of breakthrough applications by coupling light to oscillations of the electron plasma. In order to harness the full technological potential of plasmonics, coherent plasma excitations must be sustained over many cycles. On the scale of practical devices, optical properties of media are characterised by the mascroscopic dielectric function. This quantity can be determined from first principles in terms of transitions between electronic states. Understanding of losses within plasmonic systems must thus be built up from electrons to devices -- the approach taken in this thesis.

Optical losses are explored with application to prototypical plasmonic systems, noble metals copper, silver and gold. Density functional theory with quasiparticle self-consistent GW (QSGW) corrections are employed in order to build up an accurate description of the electronic states. Interband dielectric functions are consequently obtained within the linear response formalism, finding good agreement with experimental literature.

Electron interactions with lattice vibrations are found to be an essential feature in describing optical losses at low energies (also known as Drude losses). Electron-phonon interactions are included by two approaches: many body perturbation theory via the phonon contribution to the self energy and the semi-classical Williams Lax averages over nuclear displacements. The latter approach was used to determine the temperature dependence of silver optical spectra and constants from first principles, achieving agreement with experiment. Lastly, first principles calculations of silver nanodots are presented.