C172 instructor pilot reported a NMAC with a powered glider in a known practice area.

Narrative

Encountered a Powered Para-Glider while performing flight training. Required evasive action to ensure separation at XA10. While performing a 'Simulated Engine-out Emergency Procedure' we encountered a powered para-glider at a similar altitude of 3;400 feet MSL (~1;200 feet AGL) at our 2 o'clock position. As soon as I saw the Para-Glider I took the controls and executed an immediate turn to the left climbing to 5'500 MSL then returned to ZZZ airport. I also reported the position of the Powered Paraglider to ZZZ ATC Approach in order to make other aircraft aware.The area where this occurred is known and designated as a practice area used for general pilot training by local Flight Schools; Flying Clubs; and Individual Pilots as well as Search and Rescue Training exercises.The trainee/student lives in the area and has seen paragliders recently in the area typically at ~ 500 ft AGL.Recommendation: Bring awareness to the flying community that paragliders are more frequently operating in the practice area. Communication in the form of NOTAMS (Communicated via ATIS) would be helpful. This would require Paraglider Operators to inform ZZZ ATC when they will be actively operating in the area. There are three designated practice areas around the ZZZ Airport. If pilots are aware of Planned Powered Para-Glifer Activity; we could decide to use the other available practice areas or; at least be more vigilant and actively look for these small aircraft. This is the first time I have encountered this type of situation and am concerned that as Powered Para-Glider Activity increases 'as locals have expressed' there will be more close calls in the future.