Using report_py3o requires some additional Python libraries; install them in your virtualenv with this:
$ pip3 install py3o.template
$ pip3 install py3o.formats
Caution: The mentioned commands use pip3 as this will be used for Odoo 11. However, if you are testing with Odoo 10, you need to use Python 2.7 and pip.
Then, you will need to download report_py3o from the OCA reporting-engine https://github.com/OCA/reporting-engine/ project and make it available in your addons path and install it in your instance.
Refer to the Installing addon modules from GitHub recipe from Chapter 2, Managing Odoo Server Instances, for more information on this.